Question 2: Provide short and clear explanation to answer these questions! (35 points) a. Meghan and Harry are painting a room for their new baby boy. At the paint store, Harry says he prefers Navy to Ordinary Blue, Light Blue, and Green Blue. Teddy also prefers Sky Blue to Navy, and prefers Pool Blue to Navy. He also prefers Sky Blue to Pool Blue. The store is out of Sky Blue, so they buy Pool Blue and paint their apartment with it. Harry then insists that they go back, and buy Light Blue, and repaint the apartment. In your opinion, is Harry rational? (5 points) b. What happen to Marshallian demand when prices and income changes proportionately at the same rate? (5 points) c. Lisa's preference can be expressed using Leontief utility function U = min(ax, bx2) as graphed below. Explain shortly what axioms are violated! (5 points) d. If the good is normal, what is the sign of total effect of own price increase (substitution effect + income effect)? (5 points) e. Do consumer choices at c and d violate WARP? (5 points) FEBUI UNITY In Development f. The utility function of a consumer is U(X1, X2) = X1 + X2 and a consumer faces a budget constraint PIX, + P2X2 =W, where p1=1, p2=1, w=10, then calculate the Marshallian demand! Is the solution unique? If pz increases to 2 (from p2=2 to pz=1) recalculate the Marshallian demand! Is it unique? (10 points)