Question: Lisa eats pizzas and burritos. Her utility function is U ( B , Z ) = B 0 . 6 Z 0 . 4 ,

Lisa eats pizzas and burritos. Her utility function is
U(B, Z)= B
0.6Z
0.4
,
where Z is the number of pizzas consumed and B is the number of burritos consumed.
The price of burrito is PB and the price of pizza is PZ. Lisas income is W.
(a) If PB = $4, PZ = $2, and W =100, how many pizzas will Lisa buy?
(b) If the price of a burrito increases to $10 while the price of pizzas remains the same,
how many pizzas will Lisa buy?
(c) What is Lisas demand function for pizza and for burritos? [Note: you should get the
functions that depend on PB, PZ and W.
(d) What are the own price elasticities of her demand functions?

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