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Microeconomics Exercises

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A basic assumption about consumers in microeconomics is that they have preferences over different baskets of goods. Explain the concepts “preference”, “preference order”, and “basketof goods”. Exercise 1.1.2 a)If there are only two goods, it is possible to illustrate a consumer’s preferences over them with an indifference map. Draw an indifference map with three indifference curves. b)There are a few standard assumptions about what an indifference map can and cannot look like. Which are these assumptions, and what reasoning lies behind them?.