Consider the graph above when answering the following parts. Good 1 is on the x-axis and Good 2 is o

Consider the graph above when answering the following parts. Good 1 is on the x-axis and Good 2 is on the y-axis. The price of Good 2 is constant throughout the problem at $1. The consumerAc€?cs initial bundle is Point A. A. (2 Points) Given the information in the graph and at the beginning of the problem, how much income does this consumer have? INCOME = __________ B. (2 Points) What is the magnitude of the MRS of Good 1 at Point A? MRS12 = __________C. (2 Points) What is the magnitude of the MRS of Good 2 at Point D? MRS21 = __________ D. (2 Points) How much income does the individual have at Point C after the price change? INCOME = __________ E. (2 Points) If the price of Good 1 increases from $1 to $3, what is the substitution effect of the price change in terms of Good 1? SUBSTITUTION EFFECT = _________ F. (2 Points) If the price of Good 1 increases from $1 to $3, what is the income effect of the price change in terms of Good 1? INCOME EFFECT = _________ G. (2 Points) What is the compensating variation associated with the price change in Good 1? COMPENSATING VARIATION = $___________

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