In each of the following situations, the possible bundles contain apples and oranges and either 0, 1 or 2 of each. An example bundle would be 2 apples and 1 orange = (2, 1). In each part, there is a description of a set of preferences. If an ordering can be made, make the ordering of the 9 possible bundles, and list any bundles that would be on the same indifference curve. If the ordering cannot be made, give an example of which bundles cannot be ranked and explain which assumption on preferences is being violated.

a) Non-satiated in both goods. Apples always better than oranges.

b) In bundles with zero of either oranges or apples, the bundle with more oranges is better. If the bundle has 0 oranges, the bundle with more apples is better. In bundles with at least 1 apple, the best bundle is the one that has the biggest total of apples and oranges. In bundles with at least 1 orange, the better bundle is the one that generates the biggest number when the number of apples is divided by the number of oranges.

c) Non-satiation applies to all relevant bundles (So (1, 2) pref (1,0)). For the others...

(1, 0) pref (0,1) (1, 1) pref (0,2) (2, 0) pref (1,1)

(2, 0) pref (0,1) (0, 2) pref (2,0) (1, 2) pref (2,0)

(0, 2) pref (1,0) (2, 1) pref (0,2) (1, 2) pref (2,1)