Please Answer iv)
A student living in a university hostel has two options for meals: eating at the dining hall for Rs.600 per meal, or eating a meal at Dhaaba for Rs.150 per meal. His weekly food budget is Rs. 6000
Draw the budget constraint showing the trade-off between dining-hall meals and meals at Dhaaba. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A.
Suppose the price of a Dhaaba meal now rises to Rs.200. Assume that our student now spends only 30 percent of his income on dining-hall meals. Label the new optimum as point B.
iv) Use points A and B to draw a demand curve for meals at Dhaaba. What is this type of good called?
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