In Problem 1, Charlie's indifference curves have the equation , where larger constants correspond to better indifference curves. Charlie strictly prefers the bundle (9, 18) to the bundle
A) (10, 17).
B) (18, 9).
C) (11, 12).
D) More than one of these options are correct.
E) None of the above are correct.

Question

In Problem 1, Charlie's indifference curves have the equation  , where larger constants correspond to better indifference curves. Charlie strictly prefers the bundle (9, 18) to the bundle
A) (10, 17). 
B) (18, 9). 
C) (11, 12). 
D) More than one of these options are correct. 
E) None of the above are correct.

Quizplus · Accepted Answer

To compare the bundles, we need to check which bundle lies on a lower indifference curve. Let's plug in the values for each bundle into the indifference curve equation:
- Bundle (9, 18): 11e^9 + 6e^18
- Bundle (10, 17): 11e^10 + 6e^17
- Bundle (18, 9): 11e^18 + 6e^9
- Bundle (11, 12): 11e^11 + 6e^12

Comparing the values, we can see that Bundle (11, 12) has the lowest value, which means it lies on a higher indifference curve than the other bundles. Therefore, Charlie strictly prefers the bundle (9, 18) to the bundle (11, 12).

So the best choice is C.

In Problem 1, Charlie's Indifference Curves Have the Equation