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full solution and explanation 1. From the observation of one consumer behavior for several months of Year 1. In an economy where the prices of

full solution and explanation

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1. From the observation of one consumer behavior for several months of Year 1. In an economy where the prices of both kinds of goods uctuate a lot according to the foreign currency exchange rate, it was found that the purchasing behavior of consumers is as follows: Month 1. A __ Month 2. B _ Month 3. 0 Month 4. a Month 5. E _l_ 1.1 Does this consumer have a well-behaved preference? Cleany analyze why. (8 points) 1.2 Suppose that during the 1st month of the 2nd year, the price of Product 1 drops by half the original price in the 1st month of the previous year, and the price of Product 2 doubles the price in the 1st month of the previous year. Consumers Decide on Product 1 for all 7 units and Product 2 for all 2 units. Use the Laspeyres quantity index to show whether the consumer's welfare has improved or worsened compared to the previous year, or it was unable to tell. (7 points)

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