Suppose my tastes could be modeled with the utility function u(x1, x2) = 20x1^0.5 + x2, where x1 refers to mozartkugeln and x2 refers to other consumption.
a. calculate the MRS for these tastes and use your answer to prove that my tastes are quasilinear in x1.
b. consider the bundles A,B, and C as defined in part A: (bundle A: 100 mozartkugeln and $500 in other goods per month). verify that they lie on the indifference curve when tastes are described by the previously defined utility faction.
c. verify that the MRS at bundle A is as described in part A(bundle B: $600, and bundle C: $400) and derive the MRS at bundle B and C
d. verify that the MRS at the bundle (100,200) corresponds to your answer A(a)
e. how much "other goods" consumption occurs on the indifference curve that contains (100,200) when my mozartkugeln consumption falls to 25 per month? What about when it rises to 400 per month?
f. are mozartkugeln essential for me?