*4.2 Jose likes sushi, S, and ice cream, C. His utility function is U = S2C. His...

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*4.2 Jose likes sushi, S, and ice cream, C. His utility function is U = S2C. His marginal utilities are MUS = 2SC and MUC = S2. His weekly income is

€60, which he spends on sushi and ice cream only.

a. If he pays €2 for a portion of sushi and €1 for a scoop of ice cream, what is his optimal consumption bundle? Show his budget line, indifference curve, and optimal bundle, e1, in a diagram.

b. Suppose the price of a scoop of ice cream doubles to €2. How does his optimal consumption of sushi and ice cream change? Show his new budget line and optimal bundle, e2, in your diagram.

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