Hira's preferences can be represented by u(x; y) = min{2x; y}, where x is the number of bracelets and y is dollars to spend on

other things. She faces prices (px; py) = (4; 1) and her income is 24. What is her initial optimal bundle? Now if the price of a

pair of earrings rises to $3 and Hira's income stays the same, what is her new optimal bundle? What is her (a) EV and (b) CV?

You must set up the Lagrangian and derive the demand functions for this question. Be sure to clearly identify which

prices, old or new, are used to derive the values of EV vs. CV, and which utility, old or new, is used to derive EV vs.

CV.