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1. Arthur spends his income on bread and chocolate. He views chocolate as a good but is neutral about bread, in that he does not
1. Arthur spends his income on bread and chocolate. He views chocolate as a good but is neutral about bread, in that he does not care if he consumes it or not. Draw Arthur's indifference-curve map. 2. Tiffany purchases only two goods, apples (qi) and kumquats (q2). She has an income of $40 and can buy apples at $2 per pound and kumquats at $4 per pound. Her preferences are represented by the linear utility function U(qi, 92) = 3q1 + 592. What is her marginal utility of apples? What is her marginal utility of kumquats? Draw Tiffany's budget constraint. Show that Tiffany's marginal rate of substitution constant, and therefore her indifference curves are linear. What is Tiffany's optimal consumption bundle in terms of pounds of apples and pounds of kumquats
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