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Suppose that Jimís preferences are given by the utility function u(x1; x2) = x21x2, where x1 denotes bottles of ayran, and x2 denotes the number of kebab plates. A kebab dish costs $15 on average, and bottle of ayran is $3. You are told that at these prices Jim can a§ord 10 kebab plates and 40 bottles of ayran per month.
(a) Derive Jimís optimal consumption bundle.
(b) Which of the following two options would Jim prefer? Show work.
Option (1): Additional $30 that Jim can spend only on kebab.
Option (2): $3 o§ of each kebab plate ordered.
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