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U(x, y) = 2x + y
Where x is consumption of hamburgers and y is consumption of hot dogs.
c) Plot the indifference curves for: U¯ = {2, 4, 8}
d) What is the equation for the indifference curve with y on the LHS and x on the right?
e) Suppose instead that good y is the composite good and good x is salt. Pref- erences are given by: U(x, y) = y + √ x 2
Plot these indifference curves on a new graph for: U¯ = {2, 4, 8}
f) What is the marginal rate of substitution for these new preferences? What is different about the MRS when compared to the preferences for hamburgers and hot dogs?
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