Suppose I have $500 income. I only consume apple (x1) and juice (x2). p1=$6, p2=$3. Use...

Suppose I have $500 income. I only consume apple (x1) and juice (x2). p1=$6, p2=$3. Use one graph per situation and each situation are independent (return to the initial situation for each subquestions).

(a) Draw my budget line (budget set) (5 points). (b) Suppose my income increases to 600. Draw my new budget line (5 points). (c) Suppose juice increases to $4. Draw my budget line (5 points). (d) Suppose apple decreases to $5. Draw my budget line (5 points). (e) Suppose apple is taxed 10 percent. Draw my budget line (5 points). (f) Suppose juice is taxed 25 percent. Draw my budget line (5 points).

Expert Solution

Rahul Sunny answered 1 year ago

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