Question: Mr.Ms preferences for notebooks (n) and pens (e) are given by the utility functionu(e; n) = minf3e;5ng. Suppose that the price of a pen is

Mr.Ms preferences for notebooks (n) and pens (e) are given by the utility functionu(e; n) = minf3e;5ng. Suppose that the price of a pen is $5 and a notebook costs $7. You are told that his optimal consumption bundle contains 5 pens.

(a)How much must Mr. M have to spend on pens and notebooks?

(b)If Mr. M had $8 more dollars, how many more pens would he buy?

(c)If the price of a pen increased by 20%, how many pens would he buy?

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