Question
Nancy consumes chicken (C) and rice (R) for his meals.The price of a unit of chicken is $6, and the price of a unit of
Nancy consumes chicken (C) and rice (R) for his meals.The price of a unit of chicken is $6, and the price of a unit of rice is $2.
Nancy's utility function is:U = (3C)*(2R)
Nancy has $132 to spend on chicken and rice."
a)Is the indifference curve linear or non-linear
b) Determine Nancy's optimal bundle of chicken and rice to consume, given his budget and utility function
Enter Nancy's optimal amount of rice to consume (Enter as a numeric value)
c) Now rice goes on sale for $1 per unit of rice. Now determine Nancy's optimal bundle of chicken and rice to consume.
Enter Nancy's optimal amount of rice to consume (Enter as a numeric value)
d) If there is a supply disruption and there is no chicken to purchase, what happens to Nancy's utility? (Budget is still $132)
a) Decreases to a small but positive amount
b) Becomes Zero
c) not effected
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