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Suppose Joe's utility for lobster (L) and soda (S) can be represented as U = L 0.5 S 0.5 . Joe walks into a restaurant

Suppose Joe's utility for lobster (L) and soda (S) can be represented as U = L0.5S0.5. Joe walks into a restaurant with $72 and intends to spend it all there. Lobsters cost $18 each and sodas cost $2 each.

  1. Plot Joe's budget constraint, with Soda on the y-axis and Lobster on the x-axis.
  2. Derive an expression to represent the additional utility that Joe gets from consuming an additional lobster.
  3. Derive an expression to represent the additional utility that Joe gets from consuming an additional soda.

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