1. Olivia consumes only two goods, X and Y, spending her entire income I . The prices of the goods are px and py. Her utility function is u(x.y) = 2x + 4y (a) Find Olivia's demand functions for both goods. (b) Suppose initially px = 1, 1)}, = 1 and I = 100. Find Olivia's consumption levels x0 and yo. (0) Now suppose p3, rises to 3, while px and I remain unchanged. Find how much of good X Olivia would consume now. How much of the change in consumption of X from the answer you found in (b) is due to the substitution effect and how much due to the income effect? ((1) Using the Equivalent Variation concept, how much worse off is Olilia after the price increase as compared to before