Picky eater Sam eats only waffles (x) or cereals (y) for breakfast. His preferences are described by U(x,y) = 6x+4y.
a) If his income is $24 and prices are px = py = $3, how much of each food will he consume?
b) If the price of cereals drops to $1, calculate his compensating and equivalent variations. Comment on your results.