Pierre spends 36 per week on chocolate (C) and ice cream (Y). His preferences for these goods are given by the utility function (, ) = 5 + . Suppose that price per unit of C () and that of Y () are 2 each. = 5, = 1.

a) What is the utility maximising choice of C? What is the utility maximising choice of Y?

b) Explain graphically the method used in a) for finding Pierre's optimal consumption bundle. Can we use Tangency condition here? Why or why not?

c) If doubled, how should Pierre's income change for him to be as well off as before this change in prices?