question archive Thor Odinson has really let himself go
Thor Odinson has really let himself go
Subject:EconomicsPrice: Bought3
Thor Odinson has really let himself go. He spends all of his income only consuming whole pies of pizza (2) and cases of beer (b), priced at P. = 5 and ps = 15, respectively. Suppose Thor's utility function is given by u(2, b) = 2353 and his income is / = 300. (8 points total) (a) Solve for Thor's optimal bundle of pizza pies (z) and cases of beer (b). (2 points) (b) Draw Thor's budget constraint, optimal bundle, and indifference curve (on which the optimal bundle lies) all on the same graph. For full credit, you must include at least 3 points on the IC. Be sure to label the axes and relevant intercepts/points on your graph. (2 points) (c) It is projected that the price of cases of beer will be declining in the near future! Graph Thor's individual demand curve for beer when p, equals 15, 10, and 5. Be sure to clearly label your graph. (2 points) (d) Suppose that Thor's friend Korg also spends all of his income only consuming whole ph- of pizza (2) and cases of beer (b), priced at P. = 5 and po = 15 (same prices as the initial setup). Korg's utility function is given by u(2, b) = 2 +b and his income is / = 60. Solve for Korg's optimal bundle of pizza pies (2) and cases of beer (b).
