Question: 11.) Jimmy's utility function is U =A pple x B anana. The price of apples used to be $2 per unit and price of bananas

11.) Jimmy's utility function isU =Apple xBanana. The price of apples used to be $2 per unit and price of bananas $1 per unit. His income was $60 daily. If the price of apples increases to $3 and the price of banana stays the same. In order to be able to just afford his old bundle before prices change, Jimmy's would have to have a daily income of: ______

Referring to question 11, thesubstitution effectof the increase in price of apple leads to a decrease in the quantity of apple consumed by: _______(Rounded to 2decimal places)

Referring to question 11,theincome effectof the increase in the price of apple leads to a decrease in quantity of apple consumed by:____(rounded to 2 decimal places)

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