Name: Student ID:

Begin by entering your 9-digit ID number above.

Answer the questions below by filling in the boxes highlighted in light blue and completing the chart provided.
1. This question uses the budget line equation to calculate a set of plot points for a budget line. Using the prices (p1 and
p2) and level of income (M) in Table 1 (Parameter table), calculate a set of points for the budget line for the range of c1
shown in Table 2 (Plot points). Put your calculations for c2 in the cells highlighted in light blue that correspond to each
value of c1 listed. If you calculate a negative number, leave it blank.
2. Add the budget line to the chart. Note: c1 is on the horizontal axis.
See the article on the following sheet (How to add data to a chart) for help on adding data to a chart (using the Select
Data Source dialog box).
3. This question refers to the utility function and indifference curve equations below the Parameter table. Use the
equation for the indifference curve for a given level of utility to calculate a set of plot points. Each set of plot points is for
one indifference curve (IC1 or IC2). Based on the given levels of utility indicated, calculate a set of points (in the Table of
plot points, for the range given) for:

(i) U1 (using the equation for IC1) and,

(ii) U2 (using the equation for IC2).
4. Plot the two indifference curves using the plot points calculated in the question above (as a scatter chart with a smooth
line). (I.e. update/add the two IC data series in your chart.)
5. Consider the two bundles A and B. Note: each bundle is a pair of quantities, (c1, c2). Calculate the expenditure for the
each of the two bundles. Put your answers in the blue highlighted cells for Q5.
i) bundle A
ii) bundle B.

6. Compare bundle A and bundle B. In particular, comment - in the box for Q6 - on the levels of expenditure and utility.
7. Based on the chart and Q6, state the utility maximising bundle (c1*, c2*) in the blue highlighted cells for Q7.
8. Explain - in the box for Q8 - why the bundle you have identified is a utility maximising bundle.
9. Suppose that the consumer's income changes as noted (just above the box for Q9). Explain - in the box for Q9 - what
would happen to the utility maximising bundle due to the change in income, ceteris paribus.

Please enter your 9-digit ID number above to generate the parameters for your assignment.
Table 1: Parameter table Table 2: Plot points Qn 1 Qn 3(i) Qn 3(ii)
a c1: c2: BC IC1 IC2
b 0.0
d #VALUE!
p1 #VALUE!
p2 #VALUE!
m #VALUE!
Utility level 1 (U1) #VALUE!
Utility level 2 (U2) #VALUE!
#VALUE!
Utility function: #VALUE!
IC1: #VALUE!
IC2: #VALUE!

Chart for Qn 2 and 4:

IC-BC plot
12.0

10.0

8.0
BC
6.0

4.0

2.0

0.0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
2.0

0.0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Qn 5
Bundle A: Bundle B:
Units of good 1 (c1)
Units of good 2 (c2)
Expenditure

Qn 6 (150 words max)

Qn 7
The utility-maximising bundle contains: At the identified pair:
units of good 1 (c1) Slope of BL:
units of good 2 (c2) Slope of IC:

Qn 8 (150 words max)

Qn 9 (150 words max). Suppose that the consumer's income increases.

Add a data series to an existing chart
(edited from https://support.office.com/en-US/Article/Add-a-data-series-to-your-chart-25340cfb-3fa3-428c-82cf-79983125df
(For Mac users, see https://support.microsoft.com/en-us/office/add-a-data-series-to-your-chart-25340cfb-3fa3-428c-82cf-799

1. Click the worksheet that contains your chart.

2. Right-click the chart, and then choose Select Data.

3. The Select Data Source dialog box appears on the worksheet that contains the source data for the chart.

4. Click Add off the Legend Entries (Series).

5. For each series (Y2 to Y4), enter the references in the appropriate boxes.
Hint: if you click on the Y1 series and then click on Edit, you can see the sort of information you need to enter for the other series.
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5340cfb-3fa3-428c-82cf-79983125df12#OfficeVersion=MacOS)
er for the other series.