For each person.plug in F=15 and C=8 into their respective utility functions. For Bridget,this gives her a,s her indifferen curve is given by the equation 10FC=1200,or FC=120. Some bundles on this indifference curve are (12.10),(10,12).(3,40).and (40.3).For Erin this bundle gives her a utility of 2880,so her indifference curve is given by the equation 2880=2FC.or FC=120. This is the same indife Bridget and Erin have the same preferences or different preferences?Explain. They have the same preferences because for any given bundle they have the same level of utility.This means that they will rank all bundles in the same order.Note howe erthat they receive the same level of ave the same set of preferences All that i necessary is that they rank the bundles in the same order 6.Suppose that Jones and Smith have each decided to allocate $1,000 per year to an entertainment budget in the form of hockey games or rock concerts.They hoth like hocke gan s and rock erts and will cho sume positive quantities of both goods However,they differ substantially in their preference for these two forms of entertainment.Jones prefers hockey games to rock concerts,while Smith prefers rock concerts to hockey games. Draw a set of indifference curves for Jones and a second set for Smith. Given they each like both goods and they will each choose to consume positive quantities of both goods,we can assume their indifference curves have the normal convex shan Ho weve r since Jones overall preference for hockey and Smith has an overall preference for rock concerts.their two sets of indifference curves will have different slopes. Suppose that we place mock concerts on the vertical axis and hockey games on the horizontal axis,Jones will have a larger MRS than Smith.Jones is willing to give up more rock concerts in exchangeora hockey game since he prefers hockey games.The indifference curves for r Jones will b steeper Using the concept of marginal rate of substitution,explain why the two sets ofcurves are different from each other. At any combination of hockey games and rock concerts.Jones is willing to give up more rock concerts for an additional hockey game.whereas.Smith is willing to give upwer rock additional hockey game.Since the MRSisa measure of how many of onego (位 an individua is willing to give upran additional unit of the other good (hockey games) then the MRS,and hence the slope of the indifference curves,will be different for the two individuals.For each person, plug in F=15 and C=8 into their respective utility functions. For Bridget, this gives her a utility of 1200, so her indifference curve is given by the equation 10FC=1200, or FC=120. Some bundles on this indifference curve are (12,10), (10,12), (3,40), and (40,3). For Erin, this bundle gives her a utility of 2880, so her indifference curve is given by the equation  2880 = .2F 2C 2 , or FC=120. This is the same indifference curve as Bridget. c. Do you think Bridget and Erin have the same preferences or different preferences? Explain. They have the same preferences because for any given bundle they have the same level of utility. This means that they will rank all bundles in the same order. Note however, that it is not necessary that they receive the same level of utility to have the same set of preferences. All that is necessary is that they rank the bundles in the same order. 6. Suppose that Jones and Smith have each decided to allocate $1,000 per year to an entertainment budget in the form of hockey games or rock concerts. They both like hockey games and rock concerts and will choose to consume positive quantities of both goods. However, they differ substantially in their preferences for these two forms of entertainment. Jones prefers hockey games to rock concerts, while Smith prefers rock concerts to hockey games. a. Draw a set of indifference curves for Jones and a second set for Smith. Given they each like both goods and they will each choose to consume positive quantities of both goods, we can assume their indifference curves have the normal convex shape. However since Jones has an overall preference for hockey and Smith has an overall preference for rock concerts, their two sets of indifference curves will have different slopes. Suppose that we place rock concerts on the vertical axis and hockey games on the horizontal axis, Jones will have a larger MRS than Smith. Jones is willing to give up more rock concerts in exchange for a hockey game since he prefers hockey games. The indifference curves for Jones will be steeper. b. Using the concept of marginal rate of substitution, explain why the two sets of curves are different from each other. At any combination of hockey games and rock concerts, Jones is willing to give up more rock concerts for an additional hockey game, whereas, Smith is willing to give up fewer rock concerts for an additional hockey game. Since the MRS is a measure of how many of one good (rock concerts) an individual is willing to give up for an additional unit of the other good (hockey games), then the MRS, and hence the slope of the indifference curves, will be different for the two individuals