Q5. The market demand for bread is given by @3- = 18 4p and the market supply of bread is given by Q3 2 %p where p is a price of bread and Q is the quantity in millions. (a) Suppose Ann spends $20 on bread and butter a week and her utility from the consumption of bread and butter measured in dollars are given below. Note: Ann is a price taker. If the market price of butter is $4 per pack, what is Ann's optimal consumption bundle. Illustrate it in an appropriate diagram. [5] D 1 2 3 4 5 5 7 8 OCI-Jm'lrlhmwl [bl Suppose Ann's income goes up to $28 per week. How many bread and butter would Ann consume now? Show a new consumption bundle on the diagram. Are they normal goods? Calculate the income elasticity of demand for bread and butter. [4] (c) Assume a supply chain was affected by the lockdown causing the price of butter goes up to $6. What is an Ann's new consumption choice? (Note: the quantities must be integers only.)I Explain the change using income and substitution effects. [4] {d} A recent research article indicates a certain amount of consumption of butter has health benets. What do you expect will happen to the demand for butter? Why? [2]