H. Buying and Selling (Chapter 9) H1. Kyra, our resident vegan, consumes apples and bananas. Use Kyra's demand functions for apples and bananas derived in G1.1. The unit price per apple is R1 and per banana is R2. She is endowed with = (, ) = (10, 15). What is the value of Kyra's endowment? Prove that the sum of Kyra's net demands are zero. [5] H2. The prices are (1, 2) = (2, 3), and the consumer is currently consuming (1, 2) = (4, 4). Now the prices change to (1, 2) = (2, 4). Could the consumer be better off under these new prices? [3] I. Uncertainty (Chapter 12) I1. Ruby-Mae Tyson is a widow whose primary income is provided by earnings received from her husband's R2,000,000 estate. The table below shows the relationship between income and total utility for Ruby-Mae. Income Total Utility 50,000 12 100,000 22 150,000 30 200,000 36 250,000 40 300,000 42 I1.1 Construct the marginal utility table for Ruby-Mae. What is her attitude toward risk? Explain your answer including a description of the marginal utility for individuals whose risk preferences are different from Ruby-Mae's. [2] I1.2 Ruby-Mae is currently earning 10% on her R2,000,000 in a riskless investment. Alternatively, she could invest in a project that has a 0.4 probability of yielding a R300,000 return on her investment and a 0.6 probability of paying R100,000. Should she alter her strategy and move her R2,000,000 to the more risky project? [3]