(1) Suppose that Omar's marginal utility for cups of coffee is constant at 1.4 utils per cup, no matter how many cups he drinks. In contrast, his marginal utility per doughnut is 10 for the first doughnut he eats, 9 for the second, 8 for the third, and so on (that is, declining by 1 util per additional doughnut). In addition, suppose that coffee costs $1 per cup, doughnuts cost $2 each. Given that his intention is to maximize total utility, what is the minimum budget required for him to purchase the first cup of coffee? what is the total utility acquired at that minimum budget? (6 points)

* Use TU, MU and M/P table to provide your answer

(2) A luxury resort in Barbados has thus far experienced an elastic price elasticity of demand since it started operations almost 15 years ago. The hotel was purchased in January 2021 by a Canadian company. The new owners have expressed their desire for an increase of room revenue, which should come into place as of April 1, 2021. Additionally, you were appointed General Manager of the property and therefore, you are assigned this task to increase room revenues. Explain the measures you will take to accomplish the wish of the new owners.