a. Jorge likes both ramen and tacos, but he has diminishingmarginal utility for both goods. Explain what this means. (5points) 

b. Let’s say that ramen costs $15 and tacos cost $5 (Jorge buyshis ramen on Sawtelle). Jorge has $30 total to spend oneating out this month. Draw his budget constraint and also writeout the budget constraint in equation form. Put ramen on the y-axisand tacos on the x-axis. For the graph of the budget constraint,you can allow that Jorge can buy fractions of ramen/burritos. (5points)

c. [This one is a bit tricky] Let’s say that Jorge’s marginalutility for his first ramen $30, for his second ramen is $20, andafterward, his marginal utility is $0. For tacos, his first tacogives a marginal utility of $15, his second gives $10, and histhird gives $5. Explain how many tacos and how many burritos Jorgeshould buy to maximize his utility. Allow Jorge to consumefractions of goods and assume we can approximate the marginalutility for consuming a fraction of a good by multiplying thefraction consumed s by the marginal utility of consuming a unit.So, for example, if Jorge went from consuming 0 to .5 ramen, his marginal utility would be approximated by .5*MU, where MU isthe marginal utility of moving from 0 to 1 ramen. (5 points)

Answer rating: 100% (QA)

a Though Jorge likes both Ramen and Tacos his utility from either of ... View the full answer