Part I 1. For each scoop of ice cream (I) that you eat, you need 2 cherries (C) and 10 scoops of fudge (F). You are not interested in ice cream unless served with these toppings. a. Write a utility function over I, C and F that represents your preferences. b. If each scoop of ice cream costs $1, each cherry costs $0.50 and each scoop of fudge costs $0.10, then determine the optimal bundle for any income Y. 2. A consumer's utility function over apple juice A and orange juice O is U(A,O)=15A+6OO . a. How many units of apple juice is the consumer willing to accept in place of one unit of orange juice? b. If P,=0.25, P,=0.5 and Y =30, what is the optimal bundle? 3. Consider a consumer who chooses among n goods {x,,x,,...,x, } . His utility function is U(x,,%,,...,X, ) = aX, + a,x, +...+ a,x, . Write out the Marshallian demand functions. e . . 1 4. A consumer's utility function over x, and x, is U(x,,x,)= Exf +In(x,). Suppose that the pricesare =2 and P, =1. a. Find the optimal bundle when Y =4 . (Hint: consider the interior solution as well as the possible corner solutions). b. Find the optimal bundle when Y =5 . (Hint: consider the interior solution as well as the possible corner solutions)