Suppose Sarah's utility function is given by U (B,F) = BF, where B is books, and F is food. In 2012, the price of books is PB $20 and the price of food is PF = $2. Sarah's total expenditure on books and food is $600. (For all parts, except E., round your answer to one decimal. For question E, round to three decimals.) How many books will Sarah buy and how much food? What is the income elasticity of the demand for books? What is the elasticity of the demand for books with respect to the price of Books? What is the elasticity of the demand for books with respect to the price for Food? A.) B.) C.) D.) E.) = In 2013, the price of books is PB $30 and the price of food is P $1.5. If Sarah's total expenditure remains the same, then find her new optimal purchase of books and food. = = Illustrate the income effect and the substitution effect of the price change clearly on a graph. Using 2012 as base year, compute the Laspeyres index for Sarah in 2013.