a)Given the following demand function for beef (kg), P = 200 - 5Q

i)By how much would the price have to fall for consumers to be willing to buy 1 more kg of beef per day?[5 marks]

ii)If the price decreases by N$0.9, by how much will the demand changed?[5 marks]

b)Define marginal utility. Provide an argument why to maximize total utility of good x and good y, the consumer should consume until the ratio of marginal utilities over price is the same across both goods.

[6 marks]

c)Consider John who consumes two goods, (X and Y), with prices = $35, = $25 and income I

=N$1500

i)Construct budget constraint[3 marks]

ii)Draw John's budget line with good X on the horizontal axis.[3 marks]

iii)Use a graph to show the effect of an increase in income from N$1500 to N$2000.[3 marks]

iv)What will happen to the slope of the budget line if the price of good X decreases to N$18?

[5 marks]