3. (I) (32 marks) The utility function is given by: U(x,y) = 5ln(x)+y so that MUx=5 / x and MUy=1 and the budget line is x+y=100. The price of good x goes up to 5.

(a) Find the pure substitution effect, income effect, and total change in demand for good x from the change.

(b) Illustrate the changes in (a) with a graph.

(c) Are the two goods complements or substitutes?

(d) Find the EV for the price change of good x from 1 to 5.

3. {I} (32 marks) The utility function is given by: Unity} = jint) +y so that MUI=S f x and Mr] and the budget line is x+y=10. The price of good 3; goes up to 5. (a) Find the pure substitution effect, income effect, and total change in demand for good it 'om the change as defmed in our lectures. (b) Illustrate the changes in (a) with a graph. (c) Are the two goods complements or substitutes? ({1} Find the EV for the price change of good X om 1 to 5