7)Suppose that upon solving for optimal bundles of hamburgers and french fries, we determine that when the price of hamburgers is $5 and the price of fries is $2, that we consume 2 hamburgers and 5 orders of fries. Suppose further that, upon changing the price of fries to $4, we only consume 3 orders of fries. Draw out a demand curve for fries, labeling two points. This is not a trick question, this one is supposed to be easy. HW 2 Numerical Problems ✩File Edit View Tools Help4. Suppose you have an income of $100 per week. In a given week, you are faced with achoice between two goods. Good X is Pepperoni Rolls, and Good Y is a composite goodconsisting of "all other goods". Pepperoni Rolls cost $10 each and "Other goods" cost$20 each.a. Write out the equation for the budget line in the form | = f(x,y)b.Draw a graph with your budget line in this two-good framework. Fairwarning that you will want a big graph with lots of room in it for what you will beasked to do later in the question. The scaling doesn't have to be perfect, butmake sure the endpoints make sense (Hint: the x and y intercepts should occurwhere you are spending all money on one good or the other)c. Now, draw a table like this: (you don't need the borders, that's just a naturalfeature of making this on the computer)i.ii.Pepperoni Rolls (Good X)1234LO700Request edit accessComposite Good Y4.52.510Fill in the values for the composite good. Remember, we are going tospend our whole income. Do not make any assumptions about savings fornow. A couple of them are filled in as an example. (If I buy 5 pepperonirolls, I have $50 left, which allows me to buy 2.5 of Good Y.)EASOOCOShareS31+ HW 2 Numerical Problems ✩File Edit View Tools HelpRequest edit accessd. Now, mark each of the baskets from the table on your budget line.e.i.So far, you have not drawn any indifference curves. Now consider the following:Imagine your Utility is the function U = XY. That's it. So, if I have 3pepperoni rolls and 2 of composite good Y, my utility is U = (3)(2) = 6.Calculate the utility for each combination of goods you wrote in thetable.ii.f. Now that you have utilities for each combination, draw indifference curvesthrough the best goods basket, the second best goods basket(s), and thefourth best goods basket(s). This way you won't get messed up overcrowdingthe graph with indifference curves. (Hint: I am asking you to draw threeindifference curves.)i.Note that all of these baskets are feasible, but only one is the optimalchoice!5. Straight from the textbook, I like this question a lot: "The Carnival and the circus haveboth come to town. You have 6 free hours to kill."a. Suppose admission is free at both the carnival and the circus. Illustrate thebudget line that shows your options for how you can spend your day. (Thinkabout your budget in terms of time.)b. Now, support instead that admission is $2 per hour at the carnival and $4 perhour at the circus. Your income is $20. You still only have 6 hours of time. Nowillustrate your budget line. Is it still a straight line?6. Assume, in any given 24 hour day, you can allocate any mix you choose to Leisure orLabor. Your hourly wage is $10 per hour. (Note: Part e of this question can be solved with orwithout using math, where U = CL. L is leisure, C is consumption from labor wages.)a. Draw a graph with Leisure on the x axis and wage on the y axis. Draw yourbudget constraint. Be prepared to draw a few curves, so make sure you haveplenty of room. (Hint: If you spend no time on leisure, you can make $240.)b. Mark the point on your budget line (call it A) where you consume 16 hours ofEA SOOCOShareS31+

Question

7)Suppose that upon solving for optimal bundles of hamburgers and french fries, we determine that when the price of hamburgers is $5 and the price of fries is $2, that we consume 2 hamburgers and 5 orders of fries. Suppose further that, upon changing the price of fries to $4, we only consume 3 orders of fries. Draw out a demand curve for fries, labeling two points. This is not a trick question, this one is supposed to be easy. HW 2 Numerical Problems ✩File Edit View Tools Help4. Suppose you have an income of $100 per week. In a given week, you are faced with achoice between two goods. Good X is Pepperoni Rolls, and Good Y is a composite goodconsisting of &#34;all other goods&#34;. Pepperoni Rolls cost $10 each and &#34;Other goods&#34; cost$20 each.a. Write out the equation for the budget line in the form | = f(x,y)b.Draw a graph with your budget line in this two-good framework. Fairwarning that you will want a big graph with lots of room in it for what you will beasked to do later in the question. The scaling doesn't have to be perfect, butmake sure the endpoints make sense (Hint: the x and y intercepts should occurwhere you are spending all money on one good or the other)c. Now, draw a table like this: (you don't need the borders, that's just a naturalfeature of making this on the computer)i.ii.Pepperoni Rolls (Good X)1234LO700Request edit accessComposite Good Y4.52.510Fill in the values for the composite good. Remember, we are going tospend our whole income. Do not make any assumptions about savings fornow. A couple of them are filled in as an example. (If I buy 5 pepperonirolls, I have $50 left, which allows me to buy 2.5 of Good Y.)EASOOCOShareS31+> HW 2 Numerical Problems ✩File Edit View Tools HelpRequest edit accessd. Now, mark each of the baskets from the table on your budget line.e.i.So far, you have not drawn any indifference curves. Now consider the following:Imagine your Utility is the function U = XY. That's it. So, if I have 3pepperoni rolls and 2 of composite good Y, my utility is U = (3)(2) = 6.Calculate the utility for each combination of goods you wrote in thetable.ii.f. Now that you have utilities for each combination, draw indifference curvesthrough the best goods basket, the second best goods basket(s), and thefourth best goods basket(s). This way you won't get messed up overcrowdingthe graph with indifference curves. (Hint: I am asking you to draw threeindifference curves.)i.Note that all of these baskets are feasible, but only one is the optimalchoice!5. Straight from the textbook, I like this question a lot: &#34;The Carnival and the circus haveboth come to town. You have 6 free hours to kill.&#34;a. Suppose admission is free at both the carnival and the circus. Illustrate thebudget line that shows your options for how you can spend your day. (Thinkabout your budget in terms of time.)b. Now, support instead that admission is $2 per hour at the carnival and $4 perhour at the circus. Your income is $20. You still only have 6 hours of time. Nowillustrate your budget line. Is it still a straight line?6. Assume, in any given 24 hour day, you can allocate any mix you choose to Leisure orLabor. Your hourly wage is $10 per hour. (Note: Part e of this question can be solved with orwithout using math, where U = CL. L is leisure, C is consumption from labor wages.)a. Draw a graph with Leisure on the x axis and wage on the y axis. Draw yourbudget constraint. Be prepared to draw a few curves, so make sure you haveplenty of room. (Hint: If you spend no time on leisure, you can make $240.)b. Mark the point on your budget line (call it A) where you consume 16 hours ofEA SOOCOShareS31+>

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