1.

Consider the utility function that takes the form . Assume that the price of x is $2 and the price of y is $1.

In a file you upload, derive and draw the Engel curve associated with this utility function. Be sure to correctly label the axes and numerically mark the relevant points on your curve.

2.

Skylar consumes only two goods, noodles (x) and bread (y). Her utility function is described by U=3x+5y. Assume that Skylar's income is $30, the price of x is $2 and the price of y is $6.

Answer the following in a file that you upload,

(a) Find Skylar's optimal bundle.

(b) Draw a diagram that illustrates the optimal bundle along with the associated indifference curve and budget constraint. Be sure that the indifference curve and budget constraint are clearly identified.

Note that noodles (x) should be on the x-axis and bread (y) should be on the y-axis. You must label your axes and show all of your work for full credit.