Question: *4.14 Davids utility function is U = q1 + 2q2. Describe his optimal bundle in terms of the prices of q1 and q2. M *4.15

*4.14 David’s utility function is U = q1 + 2q2. Describe his optimal bundle in terms of the prices of q1 and q2. M

*4.15 Vasco likes spare ribs, q1, and fried chicken, q2. His utility function is U = 10q1 2q2. 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. M

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