Suppose a consumer obtains benefit (measured in dollars) from consuming cappuccinos equal to B(c) = 16c0.5, where c is the number of cappuccinos. The price of each cappuccino is equal to $4. Suppose the consumer wants to maximize the benefit minus expenditure (cost) from consuming cappuccinos.

(a) What is the equation for the consumer's expenditure on cappuccinos? Hint: It should be a very simple function of c.

(b) What is the consumer's objective function, i.e. the function they would want to maxi- mize?

(c) What is the optimal number of cappuccinos the consumer should consume?

(d) Graph the benefit function and the expenditure function on the same graph and indicate where the optimal number of cappuccinos is. Be sure to label any intercepts.

(e) Confirm the quantity you solved for in (c) yields a maximum.