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) = min a g

2

, mb

a. 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.

b. Calculate the demand functions for g and m.

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

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