What happens to the budget line when the price

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a) briefly explain four underlying assumptions of consumer theory.

b) suppose a consumer's income is used on two goods, X and Y. The consumer's income is $200 and the prices of X AND y are $10 and $5 respectively.

(i ) Derive and draw the consumer's budget line.

(ii) illustrate and explain what happens to the line when the consumer's income doubles to $400.

(iii) illustrate and explain what happens to the budget line when the price of goods Y is doubled.

(iv) using the budget line in (i) above illustrate and explain how consumer equilibrium which maximizesss u

Reference no: EM13314671

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