1 1 Jack consumes only food {F} and Uber rides (R). His utility function is U(F, R) = FEES. He lives in New York City (with his parents, so he doesn't have to pay rentl], where food costs $4 per unit, and Uber rides cost $211) each. His budget for these two goods is $413130 per month. a. Find the optimal amount of food and Uber rides for Jack to consume each month. Call these amounts F1 and R1. [It] points] b. The local government decides to regulate food prices to help New Yorkers. Food is now $2 per unit. Find the optimal amount of food and Uber rides for Jack to consume each month now. Explain why the optimal amounts changed. if applicable. Is food a complement to or a substitute for Uber rides? Explain. [10 points] For the local government to pay food producers for the reduced price of food. it will have to impose a tax on New York residents. Suppose the total tax amount is based on the new price difference times the amount of food Jack previously consumed: (4 2}F1. This amount will be subtracted from Jack's total budget of $4,D. How much food and Uber rides will Jack consume per month now? Call these amounts F3 and R3. [T points] Is Jack better off in part {c} relative to part {a}? Explain how you arrived at your conclusion. [3 points] Producers complain that the government hasn't compensated them sufciently for lost profits because Jack responded to the price decrease by buying more food than before. They demand to be paid [4 2}F3. If the government implements this transfer and taxes Jack accordingly [by subtracting (4 2}F3 from his budget constraint)= how much food and Uber rides will he consume? Will he be better or worse off than in part (a}'? Explain how you arrived at your conclusion. [1|] points] [NDTE: we are ignoring the producer side here, so this analysis is necessarily incomplete. We will study price regulation in more detail when we talk about marketsl]