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.

d) Illustrate his new demand curve for macadamia nuts in your part (b) diagram. Suppose the price of macadamia nuts is still $10.

e) Use your demand functions to find his new best bundle.

f) Illustrate the new budget line and the new best bundle that you found above in your diagram for part (c). Be sure to indicate the slopes of both budget lines.

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