Question 2 only

1. Hadia has an initial endowment of $500 and is interested in two things: how many visits she can make to the doctor and how much money will be left over to spend on other things. When a trip to the doctor costs $40, Hadia sees the doctor 4 times. After health care reform, a visit to the doctor will cost $10 but her taxes will rise by $160. a. Explain what conditions are necessary for Hadia to be made better off by health care reform. b. Is it possible to tell whether Hadia has been made better off with the given information? C. Explain what conditions are necessary for Hadia to be made worse off by health care reform. d. Is it possible to tell whether Hadia has been made worse off with the given information? 2. If Hadia chooses the bundle (6, 6) when prices are ($6, $2) and the bundle (10, 0) when prices are ($2, $5)check if WARP and SARP are violated