Question 1. Suppose that Bruce cares only about barbecued chicken (B) and fish (F). His utility...
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Question 1. Suppose that Bruce cares only about barbecued chicken (B) and fish (F). His utility function is U = B0.4F0.6. The price of barbecued chicken is $5, and the price of fish is $10. Bruce has a budget of $100. (a) Write down the consumers maximization problem and solve for the marginal utility of goods B (MUB) and F (MUF). (b) What is the optimal choice of B and F for Bruce to maximize his utility? (c) What is the utility generated by Bruce at this optimal choice from part (b)? (d) Draw and label a graph containing Bruce's budget line, his optimal bundle from part (b), and his indifference curve at this utility. Question 1. Suppose that Bruce cares only about barbecued chicken (B) and fish (F). His utility function is U = B0.4F0.6. The price of barbecued chicken is $5, and the price of fish is $10. Bruce has a budget of $100. (a) Write down the consumers maximization problem and solve for the marginal utility of goods B (MUB) and F (MUF). (b) What is the optimal choice of B and F for Bruce to maximize his utility? (c) What is the utility generated by Bruce at this optimal choice from part (b)? (d) Draw and label a graph containing Bruce's budget line, his optimal bundle from part (b), and his indifference curve at this utility.
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