Question 1. (26 pts.) Suppose that Johns utility function is (1, 2 ) = 21 0.5 + 2, with 1 = $4 and 2 = $2, with his budget 10. The government taxes $1/unit on 1, and the effective price of 1 now becomes $5 ($4 + $1 of tax).

a) What is the optimal consumption before (1, 2), and after the tax policy (1, 2) (6 points)?

b) Calculate the Johns Marshallian demand function 1(1) without any tax. (4 pts.)

c) Write the mathematical expression of the consumer surplus change due to the tax policy. Hint: You do not need to solve the actual consumer surplus. (2 points)