Fiona requires a minimum level of consumption, a threshold, to derive additional utility: U(X, Z) is...

Question

Fiona requires a minimum level of consumption, a threshold, to derive additional utility: U(X, Z) is 0 if

X + Z 5 and is X + Z otherwise. Draw Fiona’s indifference curves. Which of our usual assumptions are violated by this example?

Robert · Accepted Answer

Question  
Fiona requires a minimum level of consumption, a threshold, to derive additional utility: 
U(X, Z) is 0 if 
X + Z  5 and is X + Z otherwise. Draw Fiona’s indifference curves. Which of our usual 
assumptions are violated by this example? 
 
 
Answer 
 
According to the given scenario, zero utility is derived by Fiona from the consumption of both 
good until she reaches 5 units of both the goods. Or in other words, U(X,Z)= 0, if X+Z≤ 5. 
However,

Fiona requires a minimum level of consumption, a threshold, to derive additional utility: U(X, Z) is 0 if X + Z 5 and is X + Z otherwise. Draw Fiona’s indifference curves. Which of our usual...

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