Question 4: Rational Consumer (15 points) a. Jorge likes both ramen and tacos, but he has diminishing marginal utility for both goods. Explain what this means. (5 points) b. Let's say that ramen costs $15 and tacos cost $5 (Jorge buys his ramen on Sawtelle). Jorge has $30 total to spend on eating out this month. Draw his budget constraint and also write out the budget constraint in equation form. Put ramen on the y-axis and tacos on the x-axis. For the graph of the budget constraint, you can allow that Jorge can buy fractions of ramen/burritos. (5 points) c. [This one is a bit tricky] Let's say that Jorge's marginal utility for his first ramen $30, for his second ramen is $20, and afterwards his marginal utility is $0. For tacos, his first taco gives a marginal utility of $15, his second gives $10, and his third gives $5. Explain how many tacos and how many burritos Jorge should buy to maximize his utility. Allow Jorge to consume fractions of goods and assume we can approximate the marginal utility for consuming a fraction of a good by multiplying the fraction consumed s by the marginal utility of consuming a unit. So, for example, if Jorge went from consuming 0 to .5 ramen, his marginal utility would be approximated by .5*MU, where MU is the marginal utility of moving from 0 to 1 ramen. (5 points)