Maria has $7.00 to spend on breakfast. Unfortunately, the snack bar in the building where she works has only three items: muffins at $2.00 each, soup at $1.00, and cappuccinos at $1.50 each. a) Given her total utility figures in table below, Complete the MU columns. Round your answers to whole numbers. Muffins Muffins Muffins MU per Soup Soup MU $ TU MU 60 30 100 15 130 5 150 152 Quantity TU 1 65 2 125 3 155 4 165 5 170 Soup: b) How should she allocate her budget? Muffin(s): 60 30 10 Cappuccino(s): | 40 30 20 Soup MU per $ 40 30 20 Cappuccinos Cappuccinos Cappuccinos TU MU MU per $ 125 185 230 270 286 60 45 40 16 40 30 26.67 10.67

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Another instance when people are likely not to spend a dime (or a minute) on an item is when they have a dislike for mixing the item with other items available. In this case, we say the consumer has ‘non-convex preferences’ and indifference curves are bowed out from the origin. In plain language, the consumer has a preference for binging. We often feel this way towards our favorite social media app. Consider a kid who has four hours a day to spend on social media. They enjoy spending time on Snapchat (x) or spending time on Twitter (y).   a) Write the kid’s time constraint and illustrate it in a graph where you measure time spent on Snapchat along the horizontal axis and time spent on Twitter along the vertical axis. This kid’s utility from time spent on Snapchat and time spent on Twitter is U(x,y) = 4x2+ y2.   b) In your graph, draw a couple of the kid’s indifference curves. Notice how the kid’s |MRSY,X| increases along each curve as he spends more time on Snapchat and less time on…

Marla has $7.00 to spend on breakfast. Unfortunately, the snack bar in the building where she works has only three Items: muffins at $2.00 each, soup at $1.00, and cappuccinos at $1.50 each. a) Given her total utility figures in table below, Complete the MU columns. Round your answers to whole numbers. Quantity 1 2 3 4 5 Muffins TU 65 125 155 165 170 Muffins MU b) How should she allocate her budget? Muffin(s) CA Soup: Muffins MU per $ Soup TU 60 100 130 150 152 Soup MU Soup MU per $ Cappuccinos TU 125 185 230 270 286 Cappuccinos MU Cappuccinos MU per $