Principle of MicroeconomicsSpring 2020Problem Set 2Group29Charles Salomon, Ibrahim Ahmed, Ishan Malhotra, Louis Ypma1)Optimizationa.On the paperb.On the paperc.For this question, I assume that the budget constraint is a subset of the budget set. Fromthis we see that the budget constraint is comprised of bundles where my entire budgetis spent. This budget constraint “subset” can be see highlighted in xxx in the table below.d.Not sure about this onee.Still need to dof.Still need to do2)Demand, supply, and equilibriuma.From lecture, we know that the equilibrium point is the point at which supply satisfiesdemand at a particular price point. So essentially, the market price at which Qdemanded=Qsupplied. As a result, this corresponds to the price of $8 for a quantity of 20 units of agood X. Formally speaking, I relied on the fact that at an equilibrium price, the quantitysupplied is equal to the quantity demanded.