Frikkie eats meat with his bread but is generally not terribly fussed about how much bread and how much meat. Draw a fully labelled indifference curve for Frikkie between meat and bread, explaining his levels of satisfaction or utility. Indicate assumptions relating to the indifferent curve.

A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O’ Soup for $1.50 per meal. His weekly food budget is $60.    Draw the budget constraint showing the trade-off between dining hall meals and Cups O’ Soup. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A.   Suppose the price of a Cup O’ Soup now rises to $2. Using your diagram from part (a), show the consequences of this change in price. Assume that our student now spends only 30 percent of his income on dining hall meals. Label the new optimum as point B.   What happened to the quantity of Cups O’ Soup consumed as a result of this price change? What does this result say about the income and substitution effects? Explain.

Donald derives utility from only two goods, carrots (X) and donuts (Y). His utility function is as follows: U(X, Y) = XY. Donald has an income (M) of $120 and the price of carrots (PX) and donuts (PY) are both $1. a) Find the marginal utility that Donald receives from carrots (MUX) and from donuts(MUY) b) Determine the marginal rate of substitution of X for Y (MRSXY)c) How does MRSXY change as the firm uses more X, holding utility constant.d) What is Donald's budget line and relative price (PX/ PY )e) What quantities of carrots and donuts will maximize Donald's utility?

Peter's preferences over two goods, x and y, are represented by the utility function u(x, y) = y + 2x. a) Peter is currently consuming bundle A = (2,4) with 2 units of good x and 4 units of good y. Calculate his current level of utility from consuming this bundle. b) Write the expression the indifference curve representing Peter's current level of utility (i.e., the one you found in part (a). Next draw this indifference curve. c) By looking at the indifference curve you drew in part (b), answer the following questions: Does Peter like good x? Good y? Explain. What can you say about the marginal rate of substitution of good x for y, MRSxy? Is it positive? Negative? Constant? Increasing? Decreasing? Interpret/explain your answer in terms of the tradeoffs Peter is willing to make between goods to keep the same utility level. d) On the same graph you drew in part (b), draw the indifference curve for a utility level of 10. Plot and label in the graph bundles B = (1,2), C = (1,6), and D =…