Problem 1 Simona has a utility function U(I.y) : I3}. capturing her appreciation of apples and bananas. respectively. Assume the price of apples. pin. to be $1. and the price of bananas. pg. to be $2. Further assume Simonas income to be $200. [10 marks overall] (La) Determine h(:)w many units of apples and bananas she would optimally choose to ccmsume to maximise her utility subject to her budget con straint. Call this initial optimal ccnisumpticm bundle as bundle A [2 marks] Determine what her new optimal ccnlsumption bundle of apples and ba nanas is if the price of apples were to change to $2. Call the new con sumption bundle as bundle C. [2 marks] \\Vhat is the total effect on the demand of apples when the price of apples changes from $1 to $2? [2 marks] Decompose this total effect into a substituticni and an income effect. Denote as B the intermediate decomposition bundle. [2 marks] Provide a graphical illustration of these effects. together with a represen tation of the various bundles A. B and C. [2 marks]