Suppose Astrid's utility function for necklaces (n) and (pairs of) earrings (e) is U(n,e) = 0.5n + 2e. Assume also that pn = 10, pe = 15, and Y = 60. Place necklaces on the x-axis.

(a) Looking at Astrid's utility function only, does she have a general preference for either good? Explain.

(b) What is Astrid's MRS? Does it depend on the amount of necklaces and earrings she is consuming?

(c) Why is Astrid's optimal consumption likely to be a corner solution?

(d) What is her utility from consuming only necklaces? What is her utility from consuming only earrings? Assume she spends all of her income.

(e) What is Astrid's optimal consumption bundle?

(f) Graph Astrid's budget constraint, her optimal bundle, and some indifference curves (one of which intersects her optimal bundle). As always, make sure your graph is super-well labeled.