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Tracy has utility given by U(F,H) = FH^2. Last week Tracy had an income of 6 and the price of food was 1, the price of housing was 1. This week Tracy has income of 12, the price of food is 1/2 and the price of housing is 4.
a. Sketch the indifference curve U=32 for Traxy's utility function.
b. Find Tracy's optimal it condition for each week.
c. Find Tracy's utility maximizing choice of food and housing each week.
d. Is Tracy better off or worse off this week?
e. Add Tracy's week 1 and 2 budget constraints to your sketch from part a.
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