1. Consider a utility function U (X3, X3) = X4 X3. Let PA = $3 and P3: $2, and income is set at m = $40. Suppose P3 falls to P3' =1. (30 pts.) a. Before the price change, what was X*,4 and X *3, the optimal consumption bundles? Sketch the original budget line and label the point (X *3 and X*3) as A. Let X; be on the horizontal axis. (8 pts.) b. If, after the price change, income changed so that the original optimal bundle is just as affordable. What is the new income (31 ')? At (PA, P'3, m '), what is the new optimal bundle (X14, X '3)? Sketch the budget line associated with (FA, P'3, m '). Label the point (X'A, X '3) as B. (8 pts.) c. Does the substitution effect result in more X3? How many more of fewer? After the price change, how much X4 and X3 are actually bought, (X \