*7 Pam buys slices of cake and books. The price of cake is a1 a slice and the price of a book is a2. Each month, Pam spends all of her income and buys 30 slices of cake and 5 books. Next month, the price of cake will fall to 50 cents a slice and the price of a book will rise to a5. Assume that Pam’s preference map is similar to that in Figure. 8.5(a). Use a graph to answer the following questions. a Will Pam be able to buy 30 slices of cake and 5 books next month? b Will Pam want to buy 30 slices of cake and 5 books? c Which situation does Pam prefer: cake at a1 a slice and books at a2 each, or cake at 50 cents a slice and books at a3 each? d If Pam changes the quantities that she buys next month, which good will she buy more of and which will she buy less of? e When the prices change next month, will there be both an income effect and a substitution effect at work or just one of them?