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Step 2: Find the household's demands for fruit and vegetables , and for the composite good, as functions of the household's weekly income /. Hint:

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Step 2: Find the household's demands for fruit and vegetables , and for the composite good, as functions of the household's weekly income /. Hint: There is a critical income evel below which the household's optimal consumption basket is a corner solution. (23 marks) Step 3: What is the lowest level of income at which a household's consumption of fruit and vegetables will meet the Government's target? (5 marks) Step 4: Suppose that the government decides to implement its target consumption of fruit and vegetables using transfers. How much would the government need to transfer to a household each week to achieve the 5kg consumption target? Hint: Your answer will be a function of the household's income /. You should assume that transfers cannot be

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