* Kate loves cookies and chocolates. The price of cookie is $1 per piece for the first 10 pieces and $4 per piece thereafter, while the price of chocolate is $2 for the first 10 pieces and $10 thereafter. a) Kate’s has income $100. Placing the cookie on the horizontal axis and chocolate on the vertical axis, carefully sketch the budget set for Kate. Be sure to plot and label points of interests (such as kink points, intercepts and the slopes. b ) Suppose cookies(x1) and chocolates(x2) are perfect substitutes to Kate, and she is always willing to substitute two cookies for one chocolate. De- rive Kate’s utility function. c) Giventheinformationabove,findKate’sdemandforcookiesandchoco- lates.
* Kate loves cookies and chocolates. The price of cookie is $1 per piece for the first 10 pieces and $4 per piece thereafter, while the price of chocolate is $2 for the first 10 pieces and $10 thereafter.
a) Kate’s has income $100. Placing the cookie on the horizontal axis and chocolate on the vertical axis, carefully sketch the budget set for Kate. Be sure to plot and label points of interests (such as kink points, intercepts and the slopes.
b ) Suppose cookies(x1) and chocolates(x2) are perfect substitutes to Kate, and she is always willing to substitute two cookies for one chocolate. De- rive Kate’s utility function.
c) Giventheinformationabove,findKate’sdemandforcookiesandchoco- lates.
please express final numerical answers in decimal format
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