PLEASE CAN ONLY PART D BE SOLVED FOR ME 1) Suppose that Heidi has a breakfast...

PLEASE CAN ONLY PART D BE SOLVED FOR ME

1) Suppose that Heidi has a breakfast budget of 240 TL. She prefers to eat simit and tea for her breakfast. A cup of tea costs 1,0 TL and simit costs 2,0 TL. (Both are normal goods)

a) Please draw Heidi’s budget constraint and show maximum amounts of both goods on the graph.

b) Determine the slope of budget constraint

c) Add indifference curves into the graph and show the optimal consumption bundle.

d) Suppose that there was a frost in Rize, thus price of tea increases to 1,2 TL, 1. Show the new budget line on the graph 2. How does the optimal consumption bundle change? e) Suppose Heidi decides to consume 60 TL more for her breakfast (starting from the original situation), 1. Show the new budget line on the graph 2. How does the optimal consumption bundle change?

Expert Solution

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Rahul Sunny answered 1 year ago

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