Kermit has a utility function over goods X and Y that is given by: 8X/U(X,Y)= -+2Y 4 Currently X is selling for $7.50 per unit while y costs $10 per unit and Kermit has $300 to spend. a. At equilibrium, how much of each good will Kermit purchase? What is his maximum level of utility at equilibrium given his current budget? b. Suppose M. Piggy gives Kermit a $20 gift card that can be applied to purchases of good Y only. Will this change Kermit's choice of what to buy? If so, exactly what will he choose now? If not, why will this not affect his choice? Since the equilibrium depends on MU and prices and not income the gift card will not affect Kermit's choices. This is because Kermit consumes only X in equilibrium because it gives a greater utility. c. What is Kermit's utility level before and after receiving the gift card?