Question 7 [35 marks] You eat only Pink lady apples, x, , or Granny smith apples, x2. You are comparing two local supermarkets, Weightrose and Senseberries. In Weightrose the price of Pink lady apples is $2 and the price of Granny smith apples is E3. In Senseberries the price of Pink lady apples is $3 and the price of Granny smith apples is E2. Your utility from a consumption bundle (x,, x2) is given by U(x,x,) = x, "x21-". You have E60 to spend. a. Compute the MRS between x, and x2. [6 marks] b. Write the formula for the budget constraint in each of the supermarkets. Draw the budget constraints you have found. [5 marks] c. Compute the optimal consumption bundle (x,, x2) in each supermarket as a function of 0. [6 marks] d. Assume that 0=0.6. On the same graph, show the optimal consumption at each supermarket. By looking at your drawing or by doing some calculations can you tell which supermarket would you prefer to do your shopping in? Explain your answer, [6 marks] e. Assume that 0=0.4. On the same graph, show the optimal consumption at each supermarket. By looking at your drawing or by doing some calculations can you tell which supermarket would you prefer to do your shopping in? Explain your answer. [6 marks] f. For what value of O would you be indifferent as to which supermarket would you prefer to do your shopping in? Explain your answer. [6 marks]