Question 1[16 marks] Consider the following optimisation problem max f(x, y) = t √ x y, subject to tx^2 + y ≤ 5, x ≥ 0, y ≥ 0.

a) Solve the problem for t = 1.

b) State and explain the content of the envelope theorem.

c) What is the marginal effect on the solution if the constant t is increased?