Angela consumes goods x and y.Her indifference curves are described by the formula y = k/(x + 3).Higher values of k correspond to better indifference curves.

Question

Quizplus · Accepted Answer

The indifference curve formula y = k/(x + 3) implies that Angela's utility increases with higher values of y and decreases with higher values of x. Therefore, Angela prefers bundles with more of good y and less of good x. In bundle (8, 9), she has more of good y compared to bundle (9, 8), so she prefers (8, 9).

Angela Consumes Goods X and Y