8 We're back ordering from the value menu at McDonalds. Suppose your utility function for Jr Chickens and McDoubles (McDubbahs) is given below. C is the quantity of Jr Chickens and D is quantity of McDoubles. U(C,D)=C31D32MUC=3C32D32MUD=3D312C31 a) Derive your Hicksian demand for both Jr Chickens and McDoubles. b) Suppose you decided you wanted to achieve a utility of 8 , and PC=1 and PD=2. What would be your cost minimizing bundle of Jr Chickens and McDoubles? c) Show graphically the optimal bundles on a plot with C on the x-axis and D on the y-axis. Be sure to include the indifference curve and a budget constraint. Label everything and draw to scale. d) Explain the relationship between Marshallian and Hicksian demands at optimum. Use the Marshallian Demand you derived in Assignment 1 and choice of Jr Chickens and McDoubles when PC=1,PD=2 and income M=24. e) Derive your Indirect Utility and Expenditure functions f) Suppose McDonalds announced a "Dubbah Days" promotion which offered PD=.25. What is your total change in demand for McDoubles? Decompose this between the substitution and income effects by both the Slutsky and Hicks methods 8 We're back ordering from the value menu at McDonalds. Suppose your utility function for Jr Chickens and McDoubles (McDubbahs) is given below. C is the quantity of Jr Chickens and D is quantity of McDoubles. U(C,D)=C31D32MUC=3C32D32MUD=3D312C31 a) Derive your Hicksian demand for both Jr Chickens and McDoubles. b) Suppose you decided you wanted to achieve a utility of 8 , and PC=1 and PD=2. What would be your cost minimizing bundle of Jr Chickens and McDoubles? c) Show graphically the optimal bundles on a plot with C on the x-axis and D on the y-axis. Be sure to include the indifference curve and a budget constraint. Label everything and draw to scale. d) Explain the relationship between Marshallian and Hicksian demands at optimum. Use the Marshallian Demand you derived in Assignment 1 and choice of Jr Chickens and McDoubles when PC=1,PD=2 and income M=24. e) Derive your Indirect Utility and Expenditure functions f) Suppose McDonalds announced a "Dubbah Days" promotion which offered PD=.25. What is your total change in demand for McDoubles? Decompose this between the substitution and income effects by both the Slutsky and Hicks methods