Needed answer for (d) (e) Question 1 Consider a consumer with the following quasi-linear utility function U = x? + 5y Assume that the consumer faces a price of $1 for good Y, and a total income of...

Extracted text: Needed answer for (d) (e) Question 1 Consider a consumer with the following quasi-linear utility function U = x? + 5y Assume that the consumer faces a price of $1 for good Y, and a total income of $120. The price of good X decreases from $4 to $2. a) Find the optimal basket at the initial price P, = $4. Label it basket A. b) Find the optimal basket at the final price of P, $2. Label it basket C. c) What is the total effect of the price change? d) Find the decomposition basket (label it B) that will allow us to decompose the total change in X into the substitution effect and the income effect. Recall that the decomposition basket must satisfy two conditions: (1) it must generate the same utility level as the initial bundle A (2) Its tangency occurs with the decomposition budget line that has the same slope as the new budget line. What is the change in X due to the substitution effect? due to the income effect? e) Based on the income effect that you found, is the good X an inferior or a normal good?