Question 3 (36 marks) Serena's utility function is Utr. y) = 2.12\"? + 2y\"? Her income is flair = 12. The initial prices are PT = 2 and Py = 1. The price of X increases to P; = 3 {while the price of Y remains at Py = 1} [3) Find the optimal bundle with the new prices and the corresponding utility. {8 marks) {b} Compute the [minimum] income that Serena would need, with the initial prices, to obtain the [maximum] utility that she attains with the new prices. (8 marks) {c} Compute the Equivalent Variation associated to the increase in the price of X from PT = 2 to P; = 3. Explain the meaning of your answer. {3 marks)