Reginald is fond of cigars. His utility function is U (x; c) = x+ 10c:5c 2 where c is the number
of cigars he smokes per week and x is the money that he spends on consumption of other goods.
Reginald has $200 a week to spend. Cigars used to cost him $1 each, but their price went up to $2
each. This price increase was as bad for him as losing the following amount of income

Amanager of a store that sells and installs spas wants to prepare a forecast for january and june of next year. her forecasts are a combination of trend and seasonality. she uses the following equation to estimate the trend component of monthly demand: ft = 30+5t, where t = 1 in january of this year. seasonal relatives are 0.60 for january and 1.50 for june. what demands should she predict for january and june of next year