Question A. John takes microeconomics with Professor Nice. Professor Nice gives 2 exams - a mid-term and a final, and he marks each exam out of 100 . Initially, the mid-term exam counts for 50% of the overall grade while the final exam counts for 50%. However, being nice, the professor introduces another option of weighing the midterm 20% and the final 80%, and each student's overall grade is calculated using the weighing option that gives him or her a higher overall grade. John is "rational": he prefers a higher grade to a lower one. (1) Draw an indifference curve (for midterm and final exam marks) such that John's overall grade is 80 . (2) Are John's preferences convex and monotonic? Explain your answer. Question B. Mary consumes food and clothes. Her utility function is U(f,c)=2f+c, where f is the amount of food and c is the quantity of clothes Mary consumes 1. The prices for food and clothes are pf and pc (dollars per unit), respectively. Mary has an income of m (dollars). (1) Find Mary's (Marshallian) demand functions for food and clothes. (2) Suppose Mary's income m is $400 and pf=10, and pc=20. What is Mary's best affordable bundle? Suppose the government decides to subsidize Mary's food purchases in the amount of $5 per unit. What is Mary's best affordable bundle? What is the total amount of subsidy Mary receives from the government? (3) Let T be the total amount of subsidy you calculated in (2). Suppose the government decides to simply pay Mary a lump sum of T dollars instead of the subsidy for food purchases given in (2). What is Mary's best affordable bundle? Which scheme of subsidy (food purchase or lump-sum) does Mary prefer? (4) Find the income and substitution effect for food when pf changes from 10 to 5 while pc=20 and m=400