\fQuestion 3 The marginal utility for shoes and coffee is given below for five individuals. A pair of shoes costs $2, and a cup of coffee costs $1 Marginal Utility of Marginal Utility of Shoes Coffee Michelle 12 6 Renee 6 6 Douglas 6 3 Paul 3 6 Shannon 12 3 a. Which of these consumers are optimizing over their choices? Explain [2 marks] b. For those who are not, how should they adjust their spending? Explain [3 marks] ii. "Pasta is Miguel's favorite meal therefore the law of diminishing marginal utility does not apply". Do you agree with this statement? [3 marks] It is known that the indifference curve is convex. What does this tell you about the relationship between the goods? [3 marks] iv. The income effect and the substitution effect work in the same direction for a normal good. Explain how this differs for an inferior good. [4 marks]