An unnamed economist enjoys drinking beer while watching the tv show, Game of Thrones. He (or she) can buy beer in 12 oz bottles or 16 oz bottles (real pints). To this economist, beer is beer and thus there is no difference between the 12 oz and 16 oz bottles except for the amount of beer.
(a) What do we call the relationship between 12 oz and 16 oz bottles for this economist? [HINT: we would call these two goods something.]
(b) In the commodity space for 12 oz and 16 oz bottles of beer, draw 3 of this economist’s indifference curves. The answer to (a) should make it crystal clear what these indifference curves look like. Be sure to label your axes and the intercepts of the indifference curves (that’s a hint right there to their shape).