Question: please answer question D only 2. Lolita, an intelligent and charming Holstein cow, consumes only two goods, cow feed and hay. Her preferences are represented

please answer question D only

2. Lolita, an intelligent and charming Holstein cow, consumes only two goods, cow feed and hay. Her preferences are represented by the utility function U(x,y)=xx2/2+y, where x is her consumption of cow feed and y is her consumption of hay. Lolita has been instructed in the mysteries of budgets and optimization and always maximizes her utility subject to her budget constraint. Lolita has an income of $m that she is allowed to spend as she wishes on cow feed and hay. The price of hay is always $1, and the price of cow feed will be denoted by p1 a) Write Lolita's inverse demand function for cow feed. b) If the price of cow feed is p and her income m, how much hay does Lolita choose? What is the utility level that she enjoys at this price and this income? c) Suppose that Lolita's daily income is $3 and that the price of feed is $0.50. What bundle does she buy? What bundle would she buy if the price of cow feed rose to $1 ? d) How much money would Lolita be willing to pay to avoid having the price of cow feed rise to $1 (equivalent variation)? Suppose the price of cow feed rose to \$1. How much extra money would you have to pay Lolita to make her as well-off as she was at the old prices (compensating variation)? Compare equivalent and compensating variation and explain. Calculate Lolita's change in consumer surplus

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