Suppose Peter have \$500,000 to spend on a house and “othergoods” (denominated in dollars). The price

Suppose Peter have \$500,000 to spend on a house and “othergoods” (denominated in dollars). The price of 1 square foot ofhousing is \$200, and Peter chooses to purchase optimally sizedhouse at 1,250 square feet. Assume throughout that Peter spendsmoney on housing solely for its consumption value (and not as partof his investment strategy). e) Calculate Peter’s optimal housing consumption as a functionof the price of housing (px) and his exogenous income M (assumingthat py is by definition equal to 1). f) What information does a demand function from part e) impart?Is there anything unusual about this demand function? g) What is the equation of the inverse demand curve for housing?Draw this on a graph. If income were to increase, what would happento the inverse demand curve for housing? Illustrate on graph. h) Using answer from part e), verify that Peter will purchase a1,250-square-foot house when his income is 500,000 and the priceper square foot is \$200. . . .