WW MID TERM: B BECN 302 A Wi 24: Intermediate Microeconomics d Question 1 Not yet graded / 40 pts STATIC CONSTRAINED OPTIMIZATION Suppose a consumer has the following Cobb-Douglas type utility function: U (21, 12) = 01 12 where x1 and @2 are the quantities of good 1 and 2 purchased. part-a: If income of the consumer is $100, and prices of goods 1 and 2 are p1 =$5 and p2=$8, what is the optimal consumption bundle chosen by this consumer? Illustrate the optimal bundle using the consumer's budget and indifference curves. (15 pts) part-b: Now suppose the price of good 1 doubles to $10. Find the new optimal consumption bundle. Illustrate the new situation on your plot from part-a. (15 pts) part-c: Is good 1 a normal or an inferior good? Are goods 1 and 2 substitutes or complements? (10 pts) red Question 2 Not yet graded / 40 pts