c) Consider John who consumes two goods, (X and Y), with prices ?? = ?$35, ?? = ?$25 and income I =N$1500 i) Construct budget constraint  ii) Draw John’s budget line with good X on the horizontal axis. iii) Use a graph to show the effect of an increase in income from N$1500 to N$2000.  iv) What will happen to the slope of the budget line if the price of good X decreases to N$18?

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
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c) Consider John who consumes two goods, (X and Y), with prices ?? = ?$35, ?? = ?$25 and income I =N$1500 i) Construct budget constraint  ii) Draw John’s budget line with good X on the horizontal axis. iii) Use a graph to show the effect of an increase in income from N$1500 to N$2000.  iv) What will happen to the slope of the budget line if the price of good X decreases to N$18?

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