1) Suppose that Irma, when on her lunch break always chooses between bur- ritos and sushi to eat for lunch. One day she realized when going over her budget that year on year she spends 40% of her lunch budget on burritos and 60% on sushi. a) What kind of utility function would best describe Irma's preferences? b) Given your answer to a) formally right down Irma's utility maximization problem using the information provided defining burritos as b and sushi as s and their respective prices as p, and p, and income as y. c) Can you derive the demand functions for burritos and sushi for Irma? What are they? d) Suppose I told you Irma spent $1000 on lunch last year, solve for the price

1) Suppose that Irma, when on her lunch break always chooses between bur- ritos and sushi to eat for lunch. One day she realized when going over her budget that year on year she spends 40% of her lunch budget on burritos and 60% on sushi. a) What kind of utility function would best describe Irma's preferences? b) Given your answer to a) formally right down Irma's utility maximization problem using the information provided defining burritos as b and sushi as s and their respective prices as p, and p, and income as y. c) Can you derive the demand functions for burritos and sushi for Irma? What are they? d) Suppose I told you Irma spent $1000 on lunch last year, solve for the price

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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