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need help with this one, plzz help!will upvote Gabriel, a student, has a budget of 60 to spend on cappuccinos (good ) and on cups

need help with this one, plzz help!will upvote

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Gabriel, a student, has a budget of 60 to spend on cappuccinos (good ) and on cups of tea (good ) during breaks while revising for his economics examination. The prices of the two goods are and , respectively. Gabriel's preferences over the two goods are described by the utility function , for which and . (a) Explain how Gabriel's tastes over cappuccinos and cups of tea can be translated into indifference curves. Sketch some of these in a diagram. What determines their slope? [6 marks] (b) Add Gabriel's budget line to your diagram and nd the number of cappuccinos and cups of tea Gabriel chooses to consume. Explain why this consumption decision is optimal. [8 marks] (0) Margaret faces the same prices and has the same income as Gabriel, but her utility function is given by , for which Explain how Margaret will spend her income. [6 marks] (d) Suppose the price of a cup of tea rises such that and at the same time the budget Gabriel and Margaret have available to spend increases to 75. How does this affect their budget line? Do Gabriel and Margaret consume the same bundles as before? [10 marks]

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