Answer these questions

Question 4: Sara makes $100,000 a year after taxes. She treats housing and all other expenditures as prefect complements. In particular, she buys 1 unit of housing for every $3,000 she spends on other goods. (For the units to make sense, you can think about housing units as the size of her house in square feet, with 1 unit of housing being 100 square feet.) a) If Sara can buy 1 unit of housing for $1,000, Plot and label Sara's budget constraint. Put housing units on the x-axis and a composite good q representing all other goods on the y-axis. Use units of $1,000s of dollars and assume the price of q is $1,000. b) What is Sara's optimal housing consumption? Plot and label the indifference curve that contains her optimal bundle. c) On the same graph you made for part a) plot and label the budget constraint and optimal consumption bundle if the price of housing increases to $1500. d) What are the income and substitution effects to Sara's consumption of housing when the housing price increased from $1,000 to $1,500? e) On a new graph, plot Sara's demand curve for housing