Question: bundle is e1- Felix chooses between water and all other goods. If he spends all his money on water, he can buy 12 thousand gallons


bundle is e1- Felix chooses between water and all other goods. If he spends all his money on water, he can buy 12 thousand gallons per week. At current prices, his optimal Assume Felix's preferences satisfy the usual assumptions. 1.) Use the line drawing fool to draw Felix's budget Ine. Label this line L'. 2) Use the three point curved line drawing fool to draw the highest attianable indifference curve. Label this curve 1: 3.) Use the point drawing tool to indicate Felix's utility maximizing consumption bundle. Label this point 's," Carefully follow the instructions above, and only draw the required objects. During a drought, the government limits the number of gallons per week that he may purchase to 9 thousand. Discuss under which conditions his new optimal bundle, co. will be the same as e, Equilibrium consumption bundle ez O A. will be the same as bundle e, if Felix's substitution effect is larger than his income effect. O B. will not be the same as bundle e, under any conditions, O C. will be the same as bundle e, if Fell's income effect is larger than his substitution effect. Q D. will be the same as bundle e, if Felix is initially consuming less than 9 thousand gallons of water before the limit O E. will be the same as bundle e, if Felix is initially consuming less than 12 thousand gallons of water before the limit. If the two bundles differ, can you state where e, must be located? If bundles e, and @2 differ, then ey must contain thousand gallons of water. (Enter a numeric response using an integer)
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