1) Each day Kariuki, a first-year Bachelor of Commerce student eats lunch at the College cafeteria

1) Each day Kariuki, a first-year Bachelor of Commerce student eats lunch at the College cafeteria. He only likes roasted meat (T) and maize meal bread (S) and these provide him utility of the following functional form:

Utility = u(T,S) = ÖTS

a) If the price of roasted meat is KShs.100 per unit and the price of maize meal bread is KShs.25 per plate, how would Kariuki spend the KShs.1000 his sponsor gives him for lunch in order to maximize his utility.

b) If the College authorities try to discourage consumption of roast meat by raising the price to KShs.400 per unit, by how much will Kariuki’s sponsor have to increase his lunch allowance to provide him with the same level of utility he received in part (a) above?

c) How many units of roasted meat and plates of maize meal bread will he buy now (assuming that it is possible to purchase fractional amounts of both these goods)?