Question: Chris snacks on cashews (x) and macadamia nuts (y) when he watches TV. His preferences can be represented by the utility function U(x,y) = 2ln
Chris snacks on cashews (x) and macadamia nuts (y) when he watches TV. His preferences can be represented by the utility function U(x,y) = 2ln x + 4ln y where x represents the number of pounds of cashews and y represents the number of pounds of macadamia nuts.
a) Given his preferences find his demand functions for cashews (x) and macadamia nuts (y).
b) Suppose that the price of a pound of cashews is $5 and that Chris has $45 to spend on cashews and macadamia nuts. Find Chris's demand curve for macadamia nuts. Illustrate his demand curve in a diagram.
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