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Sarah enjoys eating both apples (good 1) and oranges (good 2). Her preferences over these two goods are strictly monotonic and strictly convex. Remember the formal definition of convexity: if preferences are strictly conver, then if a consumer is indifferent between two bundles, she prefers a conver combination of those bundles to either bundle. Sarah is choosing between the following bundles: Bundle ? B ? D E Apples Oranges 1 3 5 3 3 2 1 1 5 (a) List the bundles from her most preferred to her least preferred, indicating any potential cases where we don't yet have enough information to rank the bundles. (b) Suppose Sarah tells you she's indifferent between bundles A and E. Using that information, sketch a possible indifference map showing the indifference curves passing through each of the five bundles. (c) Sarah's friend Katrina also likes apples and oranges, but her preferences aren't quite the same: she prefers more fruits than less, but only cares about the total number of fruits she eats, not which kind they are. (Therefore, for example, she would be indifferent between eating 4 apples, 4 oranges, or 2 of each.) Repeat part (a) for Katrina and draw her indifference curves passing through each of the five bundles. Are her preferences strictly monotonic? Are they strictly convex?
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