1.An individual has preferences over two goods (xandy)that are represented by the utility functionU =2min(x,y}. The individual has income $60, the price ofxis $4 and the price of goodyis $2.

(a)What kind of goods does the individual considerxandyto be?

(b)What is the level of satisfaction a consumer would report if they had the following{x,y}bundles:A =(0,15};B ={2,11};C =(12,10}.

(c)What is this individual's budget constraint? Which of the bundles above are in thebudget setand which are on thebudget line?

(d)What is this individual's optimal bundle ofxandy?

(e)Suppose the price of goodxfalls by0.50. What is the new optimal bundle?