Question: 3. Mark's utility function is described as U (21:1, $2) = 373. His income is $600, and p2 = $1. First good's price decreases from

3. Mark's utility function is described as U (21:1, $2) = 373. His income is $600, and p2 = $1. First good's price decreases from $10 to $5. (a) How much the consumption of the good 1 changes due to price change? (b) Is good 1 ordinary or Gi'en? WHY? (c) By how much 931 changes since good 1 is getting relatively cheaper (i.e. substitution effect)? Use the Hicksian Decomposition. (d) By how much :61 changes due to the change in purchasing power (Le. income effect)? Use the Hicksian Decomposition. (e) Is the good normal or inferior? WHY? (f) Illustrate subsititution and income effect on a rough graph

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