Answer to Question #167628 in Microeconomics for Watu Matuze

Question

Nadia likes pork Ribs (R) and Chicken wings (C). Her utility function is U(R,C)-10R'C. Her weekly income is $90 which she spends exclusively on R and C. The price for a slab of ribs is $10 and $5 for a piece chicken. Note that MUR 20RC and MUc 10R2 a. State in words and in math Nadia's consumer problem. b. What is Nadia's optimal bundle? c. What is her demand function for ribs? d. Are ribs a normal or inferior good? e. The price of ribs falls to 5$. Draw the income and substitution effects of this price change graphically. Assume ribs are on the horizontal axis. What would Nadia's optimal bundle be if her utility function was given by U R+VC? Note that MUR R of ribs is $10 and $5 for chicken f. and MUc. Assume the price for a slab 

Answer 1

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