Tintin is a young Belgian reporter and an adventurer. He is currently in Shanghai, China, working on his case, "The Blue Lotus", with his wire fox terrier, Snowy. In the midst of his busy schedule, Tintin needs to figure out what to eat for lunch. His aim is to maximize his utility/satisfaction level from consuming the meal.

Tintin has two food choices available to him: one of China's famous noodles dish, Dandanmian, and some pearl meatballs, a delicious dish from central China.

Tintin is a young and busy reporter with a healthy appetite. He needs to find out the optimal number of noodles servings and meatballs servings that will maximize his satisfaction from lunch.

Let one small bowl (i.e., one serving) of dandanmian be denoted byX_1,and the price of one serving to be3Chinese yuan.

Let one serving of pearl meatballs be denoted byX₂and the price of one serving to be4Chinese yuan.

Tintin has24 yuanavailable as his lunch money. His utility function is given by the following utility function; U(X₁, X₂) = 6X₁X₂.

Can you help Tintin find hisoptimal "noodles-meatballs" consumption bundle? Before you do that, answer the following questions.

Now suppose with your help, Tintin has managed to maximize his utility by choosing the optimal consumption bundle. He has really enjoyed the dishes so he decides to go back to the same shop to buy his lunch the following day. His lunch budget is unchanged (i.e., 24 yuan). He finds the price of meatballs(X₂) is also unchanged (i.e., 4 yuan) but the price of noodles (X₁) has dropped from 3 yuan per serving to 2 yuan because the shop is offering a one-day "noodles discount".

As to be expected, his utility function remains the same as before, i.e., U = 6X₁X₂.

[Note, a consumer's preferences (represented by the utility function) are not likely to change overnight.]

Q1. Given Tintin's budget and the new set of prices,howmany servings of X₁can he buy if he only chooses to buy X₁(i.e., if he chose X₂to be 0 unit)?

Group of answer choices

a. X1 = 6

b. X1 = 8

c. X1 = 10

d. X1 = 12

Q2. Given Tintin's budget and the new set of prices,how many servings of X₂can he buy if he only chooses to buy X₂(i.e., if he chose X₁to be 0 unit)?

Group of answer choices

a. X2 = 4

b. X2 = 6

c. X2 = 8

d. X2 = 12

Q3. Question 17

1pts

Can you find Tintin's optimal consumption bundlenow?

Group of answer choices

a. X1 = 2, X2 = 4

b. X1 = 4, X2 = 3

c. X1 = 6, X2 = 3

d. X1 = 3, X2 = 6

Q4. What is Tintin's total utility level at his new optimal consumption bundle?

Group of answer choices

a. U = 72

b. U = 96

c. U = 108

d. U = 120

Q5. What observation do you make of Tintin's response to a drop in the price of noodles? How did Tintin's response to the price change help Tintin?

Group of answer choices

a. Tintin incorporated the new information about the drop in noodles' price to find his new optimal consumption bundle. His new decision/choice helped him to increase his utility level i.e., reach a higher indifference curve.

b. Tintin incorporated the new information about the drop in noodles' price to find his new consumption bundle. His new decision/choice hurt him because it decreased his utility level i.e., he ended up on a lower indifference curve.

c. Tintin did not respond to the price change because the new information about the drop in noodles' price is irrelevant to his satisfaction level.

d. I have no idea.

Q6. In the language of microeconomic theory, what is the name given to Tintin's response as a consumer to a drop in the price of noodles?

Group of answer choices

a. Noodles effect

b. Income Effect

c. Substitution Effect

d. Price Effect