2 Emma Has The Following Linear Preferences Over Coffee X And Candy Y U X Y 2x 3y A Graph The Indifference 1 (45.12 KiB) Viewed 33 times
2. Emma has the following linear preferences over coffee (x) and candy (y): u(x, y) = 2x + 3y (a) Graph the indifference curves for Emma that represent each of the following utility levels: 6, 12, 18, and 24. You should draw 4 indifference curves, make sure to label which one represents which utility level. (6 points) y (b) Setup the expenditure minimization problem for Emma. (4 points) X
(c) Solve the expenditure minimization problem for 2 and y when the minimum utility level is ū= 12 and the price of candy is py= 2. (10 points) (d) Graph Emma's compensated demand function for coffee re as pr changes when her minimum utility level is ū= 12 and the price of candy is py= 2. (5 points)
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