4. Liam initially has a weekly allowance of €24 to spend on eggs (at €0.40 per egg) and beans(at €0.80 per tin). Liam will only consume 4 eggs with each tin of beans and never changesthis proportion.(a) What is the utility maximising amount of eggs and beans that Liam buys each week?(b) Suppose the price of eggs rise to €0.60 per egg but the price of beans falls to €0.60 per tin.At the same time, Liam's weekly allowance rises to €30. How much of each good will Liamnow buy? Compare your answer to that in (a) and explain the difference, if there is one. Use adiagram to complement your answer.

Liam will only consume 4 eggs with each tin of beans. This denotes that Liam considers eggs and tin…

4. Liam initially has a weekly allowance of €24 to spend on eggs (at €0.40 per egg) and beans (at €0.80 per tin). Liam will only consume 4 eggs with each tin of beans and never changes this proportion. (a) What is the utility maximising amount of eggs and beans that Liam buys each week? tin. (b) Suppose the price of eggs rise to €0.60 per egg but the price of beans falls to €0.60 per At the same time, Liam's weekly allowance rises to €30. How much of each good will Liam now buy? Compare your answer to that in (a) and explain the difference, if there is one. Use a diagram to complement your answer.