Nadia likes spare ribs, R, and fried chicken, C. Her utility function is U = 10R C. Her weekly income is Y =$180, which she spends on only ribs and chicken. If she pays $20.00 for a slab of ribs and $10.00 for a chicken, what is her optimal consumption bundle? Nadia's optimal consumption bundle contains 6 slabs of ribs and 6 fried chickens. (Enter numeric responses using integers.) Suppose the price of chicken increases to $40.00. How does her optimal consumption of chicken and ribs change? Nadia's optimal consumption bundle contains 6 slabs of ribs and 1.50 fried chickens. (Enter numeric responses rounded to one decimal place.) In the figure to the right: 1.) Using the line drawing tool, draw Nadia's initial budget constraint and label it Ly. 2.) Using the point drawing tool, indicate Nadia's initial equilibrium consumption bundle and label it ey .\fDefinition - X A consumer's utility is maximized at the bundle where the rate at which the rid willingness to trade one good (good 1) for another good (good 2) equals the rate at which such trades occur in the market: U1 P1 doe MRS = = MRT. of rib where MRS is the consumer's marginal rate of substitution and MRT is the marginal rate of transformation. Rearranging terms, this condition is equivalent to Uq U2 1270 P1 P2 dget d al equi the marginal utility of a good divided by its price-the amount of R O to 11 17 13 14 15 16 17 1 This says that P1 U2 extra utility from the good per dollar spent on the good-equals -, the marginal ollow th Print Done W

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