Question 1

a) A consumer's utility is U = Q1*Q2 where each Qs are quantities of goods 1 & 2. Good 1 costs $2 while Good 2 costs $3. Income is $30. What is the optimal consumption bundle?

b) How does this change if the price of Good 2 increases to $5?

c) How would a change in a consumer's preference structure impact these results? Describe this theoretically, there is no math to solve here.