Vasco likes spare ribs, q1, and fried chicken, q2. His utility function is U = 10q12q2. His weekly income is $90, which he spends on ribs and chicken only.
a. If he pays $10 for a slab of ribs and $5 for a chicken, what is his optimal consumption bundle? Show his budget line, indifference curve, and optimal bundle, e1, in a diagram.
b. Suppose the price of chicken doubles to $10. How does his optimal consumption of chicken and ribs change? Show his new budget line and optimal bundle, e2, in your diagram.