Answer to Question #307977 in Microeconomics for lydia

Question

Adam loves UNAM shandy which he makes by combining one glass of oshikandela and two scoops of ice cream. Eve is on the diet that assigns points to food and drinks. One glass of oshikandela is one point and one scoop of ice cream is one point. She can consume any combination of oshikandela and ice cream as long as the total number of points is two. (a) What type of goods are oshikandela and ice cream for Adam? Show his indifference curve on a graph. (b)What kind of goods are Oshikandela and ice cream for Eve? Show her indiffernce curve on a graph.

Answer 1

a)

These are goods of relative complementarity.

b)

These two goods are substitute goods as he uses 2 points with any combination of oshikandela and ice cream.

his utility function can be written as: U(Oshikandela, icecream)= a(oshikandela) + b(ice-cream).