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5)MarkhaspreferencesbetweengunsandbanjosthataredescribedbytheutilityfunctionU(B,G)=G + B^1/2. Assume that both goods can be consumed in fraction. a. Whatistheoptimalconsumptionbundle (i.e. demanded bundle), ifp G =$4,p B =$1 andI=$16? b. Whatistheoptimalconsumptionbundleifp

5)MarkhaspreferencesbetweengunsandbanjosthataredescribedbytheutilityfunctionU(B,G)=G + B^1/2. Assume that both goods can be consumed in fraction.

a.Whatistheoptimalconsumptionbundle (i.e. demanded bundle), ifp_G=$4,p_B =$1 andI=$16?

b.Whatistheoptimalconsumptionbundleifp_G =$4,p_B =$1 andI=$2?

c.Find Mark's individual demand of Banjo as a function of price of banjo (p_B), price of gun (p_G) and income (I).

d.Are two goods substitutes, complements or neither?

e.Draw the Engel curve at p_G =$4,p_B =$1.

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