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Peter consumes two goods, food (F) and clothes (C). His utility function is given by U...

Peter consumes two goods, food (F) and clothes (C). His utility function is given by U (F, C) =FC^2. The price for one unit of food is pF = 1€, while the price for one unit of clothes is pC = 0.5€ and Peter’s income is 120€.

A) Which market basket maximizes Peter’s utility under the budget constraint?

B) Derive Peter’s individual demand curve of clothes.

C) How does Peter’s budget constraint change if the price of clothes increases to 1€

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