Suppose that Frank's demand for good 1 is given by

Q_D= 0.05m -4p₁

where m is his income and p1 is the price of good 1.

Currently, he has $480 to spend and the price of good 1 is $2.

(a)How much of good 1 does Frank buy?

(b)How much money does he spend on the other goods?

(c)If the price of good 1 goes up to $4, then how much of good 1 does he buy?

(d)How much money does he need in order to consume his initial bundle with this new price of good 1?

(e)How much of the change in his demand for good 1 is due to the substitution effect?