3.(10N4.4) Mr. Odde Ball enjoys commodities x and y according to the utility function U(x, y) = A. Maximize Mr. Ball's utility if Px = $3 and Py = $4 and his income is $50. B. Consider Mr. Ball's indifference curve either graphically, or by calculating the MRS. What does this tell you about Mr. Ball's behavior? Have you found a true maximum?4.(9N4.8) The lump sum principle discussed in class applies when the government transfers money to people just like it does when they tax people. This problem examines such a situation. A. Use an indifference curve graph to show that an income grant to a person provides more utility than does a subsidy (the government pays part of the price) on good x that costs the same amount to the government. [Hint: a similar graph for taxes is found in Nicholson (9th ed.) p. 107] B. Given a Cobb Douglas expenditure function E(P , P ,U.)=2P/P/U. . Let Px=1 and P.=4. Calculate the extra purchasing power it would take to raise the consumer's utility from U-2 to U=3 with prices constant. C. How much of a price subsidy to good x would be required to raise the consumers utility from U=2 to U=3 while keeping the consumers expenditures constant. D. Given what we know about the lump sum principle, how does the cost of a flat income subsidy compare to the costs of an utility equivalent price subsidy to x