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Question 1. Suppose Natalia's utility function is u(x1, x2) = 5x 2 +2x 1 a) What kind of utility function does she has? (2 points)

Question 1. Suppose Natalia's utility function is u(x1, x2) = 5x2+2x1

a) What kind of utility function does she has? (2 points)

b) Draw one indifference curve with a utility of 100 (put x1 is on the horizontal axis). (6 points) Label two points on this utility curve. (2 points)

c) In order to keep her utility constant, when Natalia increases consumption of x1 by one unit, how many units of x2 she has to give up? Explain. (4 points)

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