Multi-Part question - Josie has utility over coffee (C) and donuts (D) of the form U = C1/2D1/2. 20. Suppose prices are pC = 1 and pD = 4, and Josie has income I = 40. How much does she consume of each good and what is her indirect utility? 21. Suppose Josie receives a membership to Costco, where the price of donuts is discounted. Prices are now pC = 1 and pD = 1, and she still has I = 40. How does her optimal consumption of C and D change? What is her new indirect utility? 11 22. What is the total discount that Josie receives from her Costco membership? In other words, calculate how much more expensive her new consumption bundle would be if she had to pay the original prices. 23. What would Josie's utility be if, instead of receiving a Costco membership, she faced the original prices but had received additional income equal to the total discount you calculated in the last question? Would Josie prefer the price discount or the additional income? 12