AJ consumes two goods: fries and soda. Suppose that his marg…

AJ consumes two goods: fries and soda. Suppose that his marginal utility from drinking soda equals 1 / s, and his marginal utility from consuming fries is 1 / f. If the price of soda is $0.50, the price of fries is $4, and AJ’s income is $120, how much soda will he purchase?

Answer questions 30 to 32 with the following information:Con…

Answer questions 30 to 32 with the following information:Consider a representative consumer who maximizes utilityU=u(c,g)where c denotes consumption of a composite market good and g denotes gasoline consumption in gallons. He is subject to a budget constraint c+pgg=I where pg is the price of gasoline and the annual income.a) Assume I=50,000 and pg=$4. Derive the budget constraint for the trade-off between consumption cg and gasoline g. What is the slope of the budget constraint where c on the y- axis and g on the x-axis.

Assume that both air travel and travel by car are normal goo…

Assume that both air travel and travel by car are normal goods and you spend a fixed amount of income on both goods. Suppose that when the price of crude oil goes up by 30%, the price per mile of air travel goes up by 10% and the price per mile traveled by car goes up by 20%. Explain how the increase in the price of crude oil affects air travel and travel by car in terms of the income and substitution effects, and the overall (net) effect.