1. Suppose the Cabbage rises from $0.20 per Kilogram to $0.30 per Kilogram. The quantity demanded of cabbage falls from 800 Kilogram per week to 600 Kilogram per week. Calculate the price elasticity of demand for cabbage using the midpoint formula. Is the demand elastic, inelastic, or unit elastic? What would be the effect on total revenue of the Cabbage seller of such an increase in the Cabbage price?

2. John spends his income of $150 per week on two goods: pizzas (which cost $5 each) and books (which cost $10 each). At her current level of consumption, the marginal utility from the last pizza consumed is 20 and the marginal utility from the last book consumed is 30. Is John maximizing his utility? Why or why not? If not, what should John do to achieve a higher level of utility?