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Mary divides her $2,500 income between the consumption of food (X) and all else (Y).
Her preferences can be described by the following utility flU1ction: U = X^2Y^3.
When the price of food is $4 and of all else is $30, she chooses the blU1dle (250, 50).
a. If the price of food rises to $5, how much of each good will she choose?
b. Explain her change in consumption in terms of income and substitution effects (give a precise quantitative answer). Is this a Griffin good (how do you know)?
c. What is her demand curve for food?
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