1. Suppose that currently the market prices are $2 per unit of milk and $4 per unit of juice. At these price, you are currently consuming 10 units of each good. You are willing to give up 2 units of juice for a unit of milk. (a) How much juice must you give up in the market for a unit of milk? (b) Based on your answer to (a), could you be maximizing your utility? Draw a standard indifference curve for this bundle with the budget line depicting this situation. Put milk on the horizontal axis. (c) Suppose now that you are consuming 5 units of each good and your income is $40. The prices are still $2 and $4 respectively. Could you be maximizing utility by choosing this bundle? Again, draw a standard indifference curve for this bundle with the budget line. (d) With the $40 income, if you are currently buying 5 units of juice and your marginal utility of juice is 4, then: (i) how much milk must you buy to maximize utility? (ii) what must your marginal utility of milk equal?