The Acme shoe company sells shoes individually. There is one giant bin that has right and left shoes mixed together. Anna, Betty, Carla, and Darlene all buy shoes at Acme. All four women have different shoe preferences.
• Anna is buying shoes for an art project. It doesn’t matter if they are right shoes or leftshoes. She just wants as many shoes as she can get.
• Betty is buying the shoes to wear. In order to make a pair she needs one right shoe and one left. Extra shoes that do not form a pair have no value to Betty.
• Carla doesn’t have arches in her feet. She would prefer to have pairs of shoes, but she can wear right shoes on left feet and vice versa.
• Unfortunately, Darlene lost her right foot in an accident. She has no use for right shoes For each woman draw a separate graph and do the following:
(a) Draw an indifference curve.
(b) Write a utility function that could represent the indifference curve.
(c) Describe the MRS between right and left shoes.
(d) Draw a budget constraint with right shoes and left shoes priced the same. Place the constraint so that each woman is maximizing her utility.
(e) Now suppose Acme discounts right shoes by 20%. Draw a new budget con-straint on each graph. Indicate which women benefit from the sale and which women do not.