Write down jon budget constraint

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Suppose that jon only consumer two goods X and Y .the price of X is $2 and the price of Y is $4 jon has $40 to spend.

1)write down jon budget constraint

2)Draw a graph of the budget constraint.Be sure label the maximum quantity of X and the maxium quantity of Y that the consumer can afford.Aslo show how to find jon`s optimal choice with this budget constraint in the graph

3)Calculate the marginal rate of subsitution (MRS)at the optimal choice.Please show the procedure how you get the result.

4) suppose Xis inferior good and Y is normal good.Graphically illustrate how the optimal consumption level of X change as jon`s income increases.Clearly label the optimal consumption level of X before and after income changes in the graph.

Reference no: EM131091245

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