M 2*PA apples used to be $1, the price of bananas used to be $2, and his income used to be $40. If the price of apples increased to $4 and the price of bananas stayed constant, calculate (i) the substitution effect, (ii) income effect, (iii) the total effect of the price change of apples, and (iv) show the substitution effect, income effect and total effect in a graph (Mark the axis, curves and lines with appropriately). (1.1. (30 points) Charlie's demand function for apples is XA = where the price of apples is IL:- The price of (1.2. (30 points) The production function isf(l_, M) = 411\" .Mm, where L is the number of units of labor and M is the number of machines. If the amounts of both factors can be varied and if the cost of labor is $64 per unit and the cost of using machines is $1 per machine, calculate the total cost of producing 20 units of output. (1.3. (25 points) A competitive firm has the short-run cost function C(y) = 2ya - 16y2 + 64y + 50. (i) calculate the minimum price that the firm will produce a positive amount in the short run, and (ii) calculate the firm supply of y in the shortrun. (1.4. (20 points) The production function is fCX1,X2) = X1\"2 =I= X21\". If the price of factor 1 is $8 and the price of factor 2 is $16, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits