Sunita has a monthly income of Rs 1000 that she allocates between two goods: apples (A) and oranges (O).

a.Suppose apple costs Rs. 50 per kilogram and oranges costs Rs. 20 per kilogram. Write draw her budget constraint.

b.Suppose also that her utility function is given by the equation U(A,O)=2A+5O. What combination of apples and oranges should she buy to maximize her utility?

c.Sunita's supermarket has a special promotion. If she buys 10 kilograms of oranges (at Rs. 20 kg), she gets the next 10 kilograms for free. This offer applies only to the first 10 kilograms she buys. All oranges in excess of the first 10 kilogram (excluding bonus oranges) are still Rs. 20 per kg. Draw her budget constraint.

d.An outbreak of drought raises the price of oranges to Rs.150 per kg. The price of apples remains constant. The supermarket ends its promotion. graph her new budget constraint. What combination of apples and oranges now maximizes her utility?