Suppose you work for an investment rm in New York City {NYC}. You derive utihty from consumption... as described by the utihty mction U{C). where C denotes consumption and UH is an increasing mction. Consumption is a composite of food and housing given by: h where CF and CH denote, respectively, consumption of food and housing. Suppose that in your current job, you make $250.DIII per year. Your company offers you a one-year position in its Bolivian hranch located in La Pas. In NYC the price of food is $50 per unit and the price of housing is $750 per unit. Food is internationally traded, hut housing is non-tradahle. The dollar;f Bolivian peso exchange rate is 5 pesos per dollar. The price of housing in La Paz is 21.000 pesos. Suppose that all you care about is to maximize your utility and that you always spend all of your income on consumption [no savings}. {5 marks each] [a] What is the price of the composite consumption good in NYE? (b) What is the price of the composite consumption good in La Pas? (c) What income in dollars would allow you to buy the same number of composite consumption goods in La Pas as in NYC, i.e. C = C\"? {d} What income in pesos would allow you to have the same utility in La Paz as in NYE? e How man units of food and housi do on consume in NYC and how man would on consume 5" \"E .l' l" .l' in La Pan with your income in part {d}? Provide intuition. (f) Your boss would like to know what would he the minimum income [in dollars) you would require to he willing to work in La Pas. What would you

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