Could you just tell me how I would go about solving thisproblem? Suppose that Dm

Question

Could you just tell me how I would go about solving thisproblem?

Suppose that Dmitry Medvedev has a different utility functiondepending on whether it is raining or not in Moscow. If it israining, his utility is U = XY . If it is not raining, his utilityis U = X + Y . For each utility function U , draw a set ofindifference curves showing Dmitry’s utility levels at U =12, U = 16, and U = 24. (i.e., make two graphs (one for each U ),each with three indifference curves representing U = 12, 16,24.)

Thanks.

Explanation / Answer

Make a coordinate system with y and x axis. For U = XY and U = 12 12 = XY Y = 12/X, This is your graph. For U =X + Y Y = 12 12 = X + Y Y = 12 -X. This is your graph. Do the same for the other values.

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