Question: The utility function of the consumer is (1, 2 ) = 1 + 2. a) Let 1 = 2 , 2 = 20 = 24.

The utility function of the consumer is (1, 2 ) = 1 + 2. a) Let 1 = 2 , 2 = 20 = 24. Calculate the optimal quantity demanded of good 1 and 2. (7 points) b) Let 1 = 1 , 2 = 4 = 100. Calculate the optimal quantity demanded of good 1 and 2. (6 points) c) Let 1 = 1 , 2 = 4 and = 4. Compared to point b), by how much would the consumer decrease the quantity demanded of good 1 and good 2? (7 points)

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