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Jimmy's utility function is U = Apple x Banana. The price of apples used to be...

Jimmy's utility function is U = Apple x Banana. The price of apples used to be $4 per unit and price of bananas $1 per unit. His income is $160 daily. If the price of apples decreases to $2 and the price of banana stays the same.

1.In order to be able to just afford his old bundle before prices change, Jimmy's would have to have a daily income of: ______

2.The substitution effect of the decrease in price of apple leads to an increase in the quantity of apple consumed by: _______(Rounded to 2 decimal places if needed)

3.The total effect of the decrease in price of apple leads to an increase in the quantity of apple consumed by: _______(Rounded to 2 decimal places if needed)

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