(Victor Lima's notes, exercise 7.1) The government of Kenya is asking the World Bank for a loan. Kenya needs the funds to build schools and airports that will help to improve the services offered in the country. World Bank officials have calculated a welfare function for Kenya. This function gives a number (between 1 and 5) that represents the level of welfare for Kenyans. In the case of schools, denoted s, and airports, denoted a, in Kenya, the function is given by: W(s,a)=log(s)+a. You may assume that building an airport costs 30 million dollars and building a school costs 5 million dollars. a. Compute the minimum amount of money required to achieve a level of welfare of W=3 in Kenya. How many schools and airports are constructed with these funds? b. Assume that the World Bank is not satisfied with the number of schools resulting from part a. They would like to see more schools in Kenya so there are two options: - Send the funds of (a) plus an additional 40 million dollar package - Send the funds of (a) and subsidize the price of schools by 50%. Which policy would you recommend to achieve the World Bank's goal of more schools? Be very rigorous and justify your answer mathematically. c. Provide a graphical representation for the answer to part b. Make sure that you label all quantities carefully. (Victor Lima's notes, exercise 7.1) The government of Kenya is asking the World Bank for a loan. Kenya needs the funds to build schools and airports that will help to improve the services offered in the country. World Bank officials have calculated a welfare function for Kenya. This function gives a number (between 1 and 5) that represents the level of welfare for Kenyans. In the case of schools, denoted s, and airports, denoted a, in Kenya, the function is given by: W(s,a)=log(s)+a. You may assume that building an airport costs 30 million dollars and building a school costs 5 million dollars. a. Compute the minimum amount of money required to achieve a level of welfare of W=3 in Kenya. How many schools and airports are constructed with these funds? b. Assume that the World Bank is not satisfied with the number of schools resulting from part a. They would like to see more schools in Kenya so there are two options: - Send the funds of (a) plus an additional 40 million dollar package - Send the funds of (a) and subsidize the price of schools by 50%. Which policy would you recommend to achieve the World Bank's goal of more schools? Be very rigorous and justify your answer mathematically. c. Provide a graphical representation for the answer to part b. Make sure that you label all quantities carefully