Suppose a utility function is given by u(x1, x2) = (x1)^2 + (x2)^2.

Graph the indifference curve for utility level 100 and 400. What is wrong about the shape of the indifference curves? Does the utility function describe reasonable preferences?

Now suppose prices are p1 = 1, p2 = 2 and I = 10. Determine the optimal consumption graphically.