Andrew’s utility function for lunch is given by: Andrew prefers his lunch in an exact proportion of two parts gravy (g) to maize meal (m). Hence we can rewrite Andrew’s utility function as a. Graph...


Andrew’s utility function for lunch is given by:


Andrew prefers his lunch in an exact proportion of two parts gravy (g) to maize meal (m). Hence we can rewrite Andrew’s utility function as


a. Graph Andrew’s indifference curve in terms of g and m for various levels of utility. Show that, regardless of the prices of the two ingredients, Andrew will never change the way he prepares lunch.

b. Calculate the demand functions for g and m.

c. Using the results from part (b), what is Andrew’s indirect utility function?

d. Calculate Andrew’s expenditure function; for each level of utility, show spending as a function of pg
and pm.



May 18, 2022
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