1. Andy buys housing (good 9:) and clothing (good y) using his monthly salary of $500. (Think of m as the total square feet of apartment rented.) The price of a square foot of apartment is $1 and the price of a unit of clothing is also $1. Andy's utility function is u(at,y) : xyz. a) How much does Andy spend on rent? Andy's students are worried about Andy living in squalor. They take up a collection to help him live in decent housing. Suppose that the students want him to live in an apartment that that rents for at least $200. They consider two plans for giving him charitable aid. b) In the rst plan7 they increase Andy's income with a direct grant. How much will the plan cost? c) In the second plan7 they pay some percentage of his rent. For simplicity, suppose this lowers the price per square foot that Andy must pay. So if they pay 50 I... . .u. 1 .u . . In 1'va