Can Fabio afford to make the same choice that he was making before the reduced-fare- fora-fee program (that is, can Fabio afford the bundle that you found in part e.)? Will Fabio participate to the reduced-fare-fora-fee program? Explain by referring to the diagram that you drew in part f. There is no need to compute the numerical value of the new optimal bundle. Yes. With the new program, purchasing the same bundle still costs him $90, which is equal to his income. ??+?.?*??+??=??+??+??=?? Yes. With the new program, Fabio can still afford the old bundle and therefore he will be at least equally off as before the program. However, with the new program the opportunity cost changes. At the old bundle, the MRS was 2.25 (old opportunity cost). Because at the old bundle the MRS is higher than the new BC (1.5), Fabio is willing to give up more of other transportation than he has to give up, and therefore he will reduce the amount of other transportation and will increase the number of subway rides. He will move down his new budget line and he will achieve a higher utility