1. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y) = MIN[X.2Y]. Suppose Px = 1 and Py = 2. Draw the Income Consumption Curve for this consumer for income values M = 100, M = 200, and M = 300. Your graph should accurately draw the budget constraints for each income level and specifically label the bundles that the consumer chooses for each income level. Also, for each bundle that the consumer chooses, draw the indifference curve that goes through that bundle. Make sure to label your graph carefully and accurately. 2. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y) = XY. Therefore, MUx = 2XY and MUy=X Suppose Py = 1, and the consumer has $300 to spend. Draw the Price-Consumption Curve for this consumer for the prices of Px = 1, Px = 2, and Px = 5. Your graph should accurately draw the budget constraints for each of the prices for good X and specifically label the bundles that the consumer chooses at each price. Also, for each bundle that the consumer chooses, draw the indifference curve that goes through that bundle. Make sure to label your graph carefully and accurately. 3. (24 total points) Suppose a consumer's utility function is given by U(X,Y) = X*Y. Also, the consumer has $200 to spend, and the price of X, Px = 5, and the price of Y, Py = 2. a) (4 points) How much X and Y should the consumer purchase in order to maximize her utility? b) (4 points) How much total utility does the consumer receive? c) (4 points) Now suppose Px decreases to 1.25. What is the new bundle of X and Y that the consumer will demand? d) (6 points) How much money would the consumer need in order to have the same utility level after the price change as before the price change? e) (6 points) Of the total change in the quantity demanded of X, how much is due to the substitution effect and how much is due to the income effect? 4. (16 points) Suppose a consumer has preferences represented by the utility function U(X,Y) = MIN[2X,Y]. Suppose Px = 4 and Py = 2. Sketch the graph of the consumer's Engel Curve for good X. 5. (12 points) Refer to the following graph: Juice 20 20 13- 530 5710 20 40 Snacks Assuming that this consumer has $160 to spend on Juice and Snacks, identify three price quantity combinations that lie on the consumer's demand curve for snacks. Price of Snacks QD of Snacks