Suppose that you go to a restaurant with your friends. a) One of your friends always eat exactly one chicken wrap (C) and drinks two cups of ayran (A). He never changes this combination of food choice. (i) Write the utility function of your friend to represent his preferences. (ii) Draw couple of indifference curves of your friend on graph with appropriate labels. (iii) Determine the demand function of your friend for each product as a function of prices and income. Denote prices as Pc, Pa; income as M. b) Suppose that one of your friends does not care if she consumes spaghetti(S or noodle(N).She wants to consume either two-dish spaghetti or two-dish noodle or any combination of both which adds up to two dishes. (i) Write the utility function of your friend to represent his preferences. (ii) Draw couple of indifference curves of your friend on graph with appropriate labels. (iii) Denote prices as Pn, Ps; income as M. If Pn < Ps, then determine the demand function of your friend for each product as a function of prices and income.
Suppose that you go to a restaurant with your friends.
a) One of your friends always eat exactly one chicken wrap (C) and drinks two cups of ayran (A). He never changes this combination of food choice.
(i) Write the utility function of your friend to represent his preferences.
(ii) Draw couple of indifference
(iii) Determine the demand function of your friend for each product as a function of prices and income. Denote prices as Pc, Pa; income as M.
b) Suppose that one of your friends does not care if she consumes spaghetti(S or noodle(N).She wants to consume either two-dish spaghetti or two-dish noodle or any combination of both which adds up to two dishes.
(i) Write the utility function of your friend to represent his preferences.
(ii) Draw couple of indifference curves of your friend on graph with appropriate labels.
(iii) Denote prices as Pn, Ps; income as M. If Pn < Ps, then determine the demand function of your friend for each product as a function of prices and income.
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