Question 3 (4 points) Aditya consumes coconuts and the demand curve of Aditya is given by 13(1)) 2 100 p, where p is price of each coconut. a. (2 points) If the price of coconut is Rs. 50, what is the total quantity demanded by Aditya? What is the consumer surplus from coconut's consumption? b. (2 points) Suppose the price of coconut falls to Rs. 20. What is the change in co- conut's consumption and the change in consumer surplus? Question 4 (8 points) Suppose Aparna has income of Rs 40,000 this year and Rs. 22,000 next year. She can borrow and lend at 10% per annum and there is no ination. Consumption cost Re 1 per unit in both the years. a. (4 points) What is the present value and future value of Aparna's income? Briey show your steps. Write down the \"present-valued\" version of her budget constraint. b. (2 points) Suppose her utility is given by U (61,62) = (3162 . Derive the optimal consumption bundle of Aparna. Is she a borrower or saver in the rst year? c. (2 points) Suppose, the interest rate falls to 1% . What would be new consumption bundle? Question 2 (4 points) Priya's preferences for diet coke and herbal tea can be represented by the utility function, Md, h) = d + h , where d is the number of cans of diet coke and h is the number of cups of herbal tea she consumes. Priya has $12 to spend. Initially, diet coke cost $2 each and herbal tea cost $3 each, but then the price of diet coke rose to $4. Calculate the compensating variation and equivalent variation for this price change. Show your work