# 1. Rick consumes 2 goods, Chic

1. Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M, S) = M2/3 S1/3 and
his income is m. The price of Chicken McNuggets is p, and the price of Szechuan sauce is 1.
a. Write down Rick’s budget constraint. What is the slope of his budget constraint?
b. Find Rick’s marginal utilities of each good, and find his marginal rate of substitution (MRS).
c. Write down an equation showing the relationship between Rick’s MRS and the slope of his budget constraint
that must hold if Rick is maximizing utility.
d. Use the equation from part (c) and the budget constraint from part (a) to find Rick’s demand for each of the two
goods.
e. Suppose m=100 and p=1. How much of each good does Rick consume? Draw a graph showing Rick’s budget
constraint and indifference curve passing through his chosen consumption bundle.
f. Suppose m=100 and p=2. How much of each good does Rick consume? On the same graph from part (e), show
Rick’s budget constraint and indifference curve passing through his new chosen consumption bundle.
g. On the same graph, show the (hypothetical) budget constraint that is tangent to the indifference curve from
part (e) but parallel to the budget constraint in part (f).
h. On the same graph, show the income and substitution effects of the increase in p from 1 to 2 on Rick’s
consumption of Chicken McNuggets. Are Chicken McNuggets a normal or inferior good for Rick? Explain your
i. Find the equation representing the (hypothetical) budget constraint drawn in part (g). Hint: you know this
budget constraint has the same prices as in part (f), so you need to find the income level m that makes the
budget constraint just tangent to the indifference curve passing through Rick’s chosen consumption bundle in
part (e).
j. Find the amount of each good that Rick would consume if is his budget were the one found in part (i). What are
the numerical values of the income and substitution effects shown graphically in part (h)?

Looking for help on g-j

# 1. Rick consumes 2 goods, Chic

1. Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M, S) = M2/3 S1/3 and
his income is m. The price of Chicken McNuggets is p, and the price of Szechuan sauce is 1.
a. Write down Rick’s budget constraint. What is the slope of his budget constraint?
b. Find Rick’s marginal utilities of each good, and find his marginal rate of substitution (MRS).
c. Write down an equation showing the relationship between Rick’s MRS and the slope of his budget constraint that must hold if Rick is maximizing utility.
d. Use the equation from part (c) and the budget constraint from part (a) to find Rick’s demand for each of the two goods.
e. Suppose m=100 and p=1. How much of each good does Rick consume? Draw a graph showing Rick’s budget constraint and indifference curve passing through his chosen consumption bundle.
f. Suppose m=100 and p=2. How much of each good does Rick consume? On the same graph from part (e), show Rick’s budget constraint and indifference curve passing through his new chosen consumption bundle.
g. On the same graph, show the (hypothetical) budget constraint that is tangent to the indifference curve from part (e) but parallel to the budget constraint in part (f).
h. On the same graph, show the income and substitution effects of the increase in p from 1 to 2 on Rick’s consumption of Chicken McNuggets. Are Chicken McNuggets a normal or inferior good for Rick? Explain your
i. Find the equation representing the (hypothetical) budget constraint drawn in part(g). Hint: you know this budget constraint has the same prices as in part (f), so you need to find the income level m that makes the

budget constraint just tangent to the indifference curve passing through Rick’s chosen consumption bundle in
part (e).
j. Find the amount of each good that Rick would consume if is his budget were the one found in part (i). What are
the numerical values of the income and substitution effects shown graphically in part (h)?

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.