Question

Practice Problem Isabel spends $10 weekly for personal care items. When shopping, she usually buys the same shampoo so.25 (pu) per ounce and spends the rest of her budget on other personal care items (q2) model priced at p $1. Her preferences are expressed with quasilinear utility function U-2q10+q the function is linear (q), and another- non-linear(2q: (qı). which costs led as a composite good where one component of 05). 1. Solve for Isabel's optimal weekly bundle of personal care items using Tangency Condition approach. Illustrate the optimal bundle. change? Solve. Illustrate alongside the original solution using different colo. contribute to the utility in a non-linear fashion) and the composite good (the good preferences for which 2. Suppose Isabel's income rose, and she now spends $15 on personal care products. How does her optimal bundle 3. How does the increase in income affect Isabel's consumption of shampoo (the good preferences for which contribute to the utility in a linear fashion)?