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3. Deja, the cashew and berry consumer, has a utility function of u(x1, x2) = 4x1+x2, where x is her consumption of cashew and x2
3. Deja, the cashew and berry consumer, has a utility function of u(x1, x2) = 4x1+x2, where x is her consumption of cashew and x2 is her consumption of berries. (a) The commodity bundle (25,0) gives Deja a utility of 20. Other points that give her the same utility are (16, 4), (9, ...), (4, ...), (1, ...) and (0, ...). Plot these points on the axes and draw an indifference curve through them. (b) Suppose that the price of a unit of cashews is 1, the price of a unit of berries is 2, and Deja's income is 24. Draw Deja's budget line. (c) How many units of cashews does she choose to buy? How many units of berries? (d) Find some points on the indifference curve that gives her a utility of 25 and sketch this indifference curve. (e) Now suppose that the prices are as before, but Deja's income is 34. Draw his new budget line. How many units of cashew will he choose? How many units of berries
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