A.Daniel is a diligent student who loves getting flat 1s, but he also loves watching movies. Daniel is awake for 100 hours each week, and studying and watching movies are his only two activities. Daniel must study for 20 hours per week for each flat 1 he earns. Each movie is 2 hours long.

1. Draw Daniel'sbudget constraint(label this budget constraintB₁) below that shows the trade-off between the number of flat 1s he can receive and the number of movies he can watch.
2. Assuming that he is happiest when he earns three flat 1s, draw anindifference curve (label itI₁) below that marks his optimal choice (label itA) of studying and movie watching. How many movies does he watch each week?

With the new semester beginning, Daniel decides to get his difficult requirements out of the way. Each class now requires him to study for 25 hours per week to get flat 1.

1. Draw the new budget constraint (label itB₂) on your graph below. Assume Daniel still wants to get three flat 1s.
2. Draw another indifference curve (label itI₂). Indicate the new optimal point (label itB).
3. As to Daniel's decision, which effect dominates:income effect orsubstitution effect? Explain.