Lucy's company has just promoted her to a managerial position and given her a new office. She is very fond of small Persian carpets and Native American paintings and wants to get some carpets and paintings for her office. Her utility function for carpets (x) and paintings (y) is given by Using Excel's charting tool, draw an indifference curve for U = 4 and another one for U = 6, where both indifference curves contain 1, 2, 4, and 8 carpets on a graph, with carpets on the horizontal axis and paintings on the vertical axis. As described in Exercise 8.1, Lucy wants carpets and paintings for here office. Her company has given her a budget of $7200 for this purpose. Persian carpets of the size that she wants can be purchased for $900 each and paintings from a local Native American artist cost $400 each. Using Excel's charting tool, draw Lucy's budget constraint if her budget is $5000. Use 0, 1, 2, 3, and 5 carpets as possible quantities. Put carpets on the horizontal axis and paintings on the vertical axis. Combining the information in problem 8.1 and 8.2a, Use Excel to illustrate Lucy's utility-maximizing solution given that her budget is $5,000, the price of a carpet is $1000, and the price of a painting is $500.

20 Problem 8.1 Lucy's company has just promoted her to a managerial position and given her a new office. She is very fond of small Persian carpets and Native American paintings and wants to get some carpets and paintings for her office. Her utility function for carpets (x) and paintings (y) is given by As described in Exercise 8.1, Lucy wants carpets and paintings Problem 8.2 for here office. Her company has given her a budget of $72000 for this purpose. Persian carpets of the size that she wants can be purchased for $900 each and paintings from a local 18 Native American artist cost $400 each. 16 1 2 14 12 a. Using Excel's charting tool, draw Lucy's budget constraint if her budget is $5000. Use 0, 1, 2, 3, and 5 carpets as possible quantities. Put carpets on the horizontal axis and paintings on the vertical axis. 10 3 3 U(x,y) = xy Using Excel's charting tool, draw an indifference curve for U = 4 and another one for U = 6, where both indifference curves contain 1, 2, 4, and 8 carpets on a graph, with carpets on the horizontal axis and paintings on the vertical axis. 8 8 4 6 5 PX^x+Pyy=Y 4 4 6 2 7 y= 7200-900x/400 40 IC1 IC2 8 0 0 1 2 16 1 1 4 5 36 1 3 9 x 35 30 25 20 Ly 0 2 18 2 8 10 18 4 9 4 4 11 1 15.75 15 8 4.5 8 2 12 2 13.5 13 3 10 5 11.25 6.75 14 5 0 15 0 2 4 6 8 10 16 17 18 19 20