4.5 Andrew’s utility function for lunch is given by:

U

(l) = l Andrew prefers his lunch in an exact proportion of two parts gravy (g) to maize meal (m). Hence we can rewrite Andrew’s utility function as U(l

) = U(g, m) = minag 2 , mb a.

b.

c.

d.

Graph Andrew’s indifference curve in terms of g and m for various levels of utility. Show that, regardless of the prices of the two ingredients, Andrew will never change the way he prepares lunch.

Calculate the demand functions for g and m.

Using the results from part (b), what is Andrew’s indirect utility function?

Calculate Andrew’s expenditure function; for each level of utility, show spending as a function of pg and pm.