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Homework2 2024?1?27? 04:58 Intermediate Microeconomics Spring 2024 Homework 2 Demand (Chapter 6 in the book) Problem 1. Chad's utility function is $U(x_p,x_c) = x_px_c$, where $x_p$ is protein shakes in gallons and $x_c$ is chicken breasts in pounds. We want to find Chad's demand function for protein shakes $x_p(p_p,p_c, m)$ and for chicken breasts $x_c(p_p,p_c,m)$, where $p_p$ - price of a gallon of protein shape, $p_c$ - price of a pound of chicken breasts, and $m$ - Chad's income. (a) Write Chad's budget line: $p_px_p + p_cx_c = m$ (b) Write the slope of Chad's indifference curve at point $(x_p,x_c)$ $\MRS = -\frac{p_c}{p_p}$ (c) Chad's indifference curve is tangent to his budget constraint at point $(x_p,x_c)$ if the following condition is satisfied: $p_px_p + p_cx_c = m$ $\MRS = -\frac{p_c}{p_p}$ (d) Given the equation in (c) and Chad's budget constraint, what is Chad's demand function for protein shakes $x_p(p_p,p_c,m)$? (e) Given the equation in (c) and Chad's budget constraint, what is Chad's demand function for chicken breasts $x_c(p_p,p_c,m)$? f) What fraction of income does Chad spend on protein shakes? g) What fraction of income does Chad spend on chicken breasts? h) Is protein shake a normal good for Chad? i) Is chicken breast an inferior good for Chad? j) Is protein shake an ordinary good for Chad?

          Homework2
2024?1?27? 04:58
Intermediate Microeconomics
Spring 2024
Homework 2
Demand (Chapter 6 in the book)
Problem 1. Chad's utility function is $U(x_p,x_c) = x_px_c$, where $x_p$ is protein shakes in
gallons and $x_c$ is chicken breasts in pounds. We want to find Chad's demand function for
protein shakes $x_p(p_p,p_c, m)$ and for chicken breasts $x_c(p_p,p_c,m)$, where $p_p$ - price of a gallon
of protein shape, $p_c$ - price of a pound of chicken breasts, and $m$ - Chad's income.
(a) Write Chad's budget line:
$p_px_p + p_cx_c = m$
(b) Write the slope of Chad's indifference curve at point $(x_p,x_c)$
$\MRS = -\frac{p_c}{p_p}$
(c) Chad's indifference curve is tangent to his budget constraint at point $(x_p,x_c)$ if the
following condition is satisfied:
$p_px_p + p_cx_c = m$  $\MRS = -\frac{p_c}{p_p}$
(d) Given the equation in (c) and Chad's budget constraint, what is Chad's demand
function for protein shakes $x_p(p_p,p_c,m)$?
(e) Given the equation in (c) and Chad's budget constraint, what is Chad's demand
function for chicken breasts $x_c(p_p,p_c,m)$?
f) What fraction of income does Chad spend on protein shakes?
g) What fraction of income does Chad spend on chicken breasts?
h) Is protein shake a normal good for Chad?
i) Is chicken breast an inferior good for Chad?
j) Is protein shake an ordinary good for Chad?

$Homework2 2024?1?27? 04:58 Intermediate Microeconomics Spring 2024 Homework 2 Demand (Chapter 6 in the book) Problem 1. Chad's utility function is U(xp,xc) = xpxc, where xp is protein shakes in gallons and xc is chicken breasts in pounds. We want to find Chad's demand function for protein shakes xp(pp,pc, m) and for chicken breasts xc(pp,pc,m), where pp - price of a gallon of protein shape, pc - price of a pound of chicken breasts, and m - Chad's income. (a) Write Chad's budget line: ppxp + pcxc = m (b) Write the slope of Chad's indifference curve at point (xp,xc) = -(pc)/(pp) (c) Chad's indifference curve is tangent to his budget constraint at point (xp,xc) if the following condition is satisfied: ppxp + pcxc = m = -(pc)/(pp) (d) Given the equation in (c) and Chad's budget constraint, what is Chad's demand function for protein shakes xp(pp,pc,m)? (e) Given the equation in (c) and Chad's budget constraint, what is Chad's demand function for chicken breasts xc(pp,pc,m)? f) What fraction of income does Chad spend on protein shakes? g) What fraction of income does Chad spend on chicken breasts? h) Is protein shake a normal good for Chad? i) Is chicken breast an inferior good for Chad? j) Is protein shake an ordinary good for Chad?$

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