Question 1: a. Aiden is a customer buys only milk and pizza. (i) In 2020, Aiden earns $20,000, milk is priced at $2 a carton and pizza is priced at $4 a unit. Draw Aiden's budget constraint. (ii) Now suppose that all prices increase by 10% in 2021 and that Aiden's salary increases by 10% as well. Draw Aiden's new budget constraint. How would Aiden's optimal combination of milk and pizza in 2020. How would Aiden's optimal combination of milk and pizza in 2021 compare to his optimal combination in 2020? b. A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total costs of $8 and fixed costs of $200. What is the firm's: (i) Profit? (ii) Marginal cost? (iii) Average variable cost? (iv) Is the efficient scale of the firm more than, less than, or exactly 100 units? c. Suppose a technological advance reduces the cost of making tablet devices. 0 Use a supply and demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for tablet devices. (ii) Tablet devices and laptops are substitutes. Use a supply and demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for laptops. Should laptop producers be happy or sad about the technological advance in tablet devices? (iii) Tablet devices and apps are complements. Use a supply and demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for apps. Should app developers be happy or sad about the technological advance in tablet devices