The government also imposes an overseas travel ban. (i) Determine the household's optimal consumption bundle in this changed circumstance. Show the working. (ii) What values of the constants in the picture would result in the same preferences and the same price of a day spent on domestic holiday travel as pre-COVID-19? For these values, determine the range of ? over which the consumption of domestic holiday travel will fall during the pandemic. Show the working. (iii) Now, suppose that preferences are the same as pre-COVID-19 but the price of a day spent on domestic holiday travel is 20% cheaper than its pre-COVID-19 level. In this case, determine the range of ? over which the consumption of domestic holiday travel will be higher during the pandemic. Show the working.

During the Covid-19 pandemic, the household confronts a new reality which impacts their preferences, their income, and the prices of the goods. Specifically, their utility function changes to U(x, z,, z,) = vx+0./z, +6./2, where 0 and 6 are both positive constants. Note also that the marginal utility of an extra day spent on domestic holiday travel and the marginal utility of an extra day spent on overseas holiday travel also change to MU and MU : respectively. However, the marginal utility of an extra unit of annual consumption of everyday necessities is unchanged and given by MU = 2 x The household's income falls to y x 50000 where 0