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Kionda has been saving for vacation. She has $1,200. The price of hotel per day is $200 and the activities she wants to participate

 

Kionda has been saving for vacation. She has $1,200. The price of hotel per day is $200 and the activities she wants to participate in cost $100 each. a. Draw her budget constraint for hotel stays and activities. b. Draw what her indifference curves would look like if hotel stays and activities are perfect complements? b. Suppose her utility function over hotel stays and activities is; U(h, a) = h/43/4 Set up her utility maximization problem using the Lagrangian expression. c. Take the derivatives of the Lagrangian and solve for optimal hotel and activi- ties. d. Kionda got a bonus from work, so she is now staying 5 days at the hotel. Assuming the utility function from part (b), how much was her bonus? How many activities will she do?

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