Use a cell reference or a single formula where appropriate in order to receive full credit.

Lucy wants carpets and paintings for her office. Her company has given her a budget of $7,200 for this purpose. Persian carpets of the size that she wants can be purchased for $900 each and paintings from a local Native American artist cost $400 each.

Lucy's Budget$7,200

Price of a Carpet$900

Price of a Painting$400

a)Use Excel to draw Lucy's budget constraint if her budget is $7,200. Use 0, 1-8 carpets as possible quantities. Put carpets on the horizontal axis and paintings on the vertical axis.

b)Find the values of y when U₁ = 4 and when U₂ = 6 for x-values of 0, 1,-8. The utility function for carpets (x) and paintings (y) is given by U=sqrt(xy).

U₁=4

U₂=6

Use Excel to illustrate Lucy's utility-maximizing solution given that her budget is $7,200, the price of a carpet is $900, and the price of a painting is $400.