Simple Economics Problems.
1. Using graphical analysis, show the optimal choice between two goods for a
consumer interested in maximizing utility subject to a budget constraint
when the indifference curves are concave to the origin. Be sure to explain
in your own words why the consumer chooses where she does.
Figure 1: Concave Indifference Curves
2. A consumer purchases two goods, and . The utility function is
. The marginal utilities are and . The prices are and and income is .
Given this information, show that the equation for the demand curve
for is .