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2. Assume the consumer from Q1 has the following indifference map, where the MRS = -20 along Ray #1 and MRS = -15 along Ray #


Please answer question 2 and show the work.


This is Q1 and answer for Q1 needed to answer question 2

Wich der a consumers annual budget constraint for two qoods: everything else and toys answering the following questions, p

= 20 let Py = 1 x= toys Y = Everything Else Income = 60,000 Budget construird is: 20x + y = Gegovo (Everything else) Gout Bud

3000 X(Toys) 2 New Budget construint 20x + y = 61,000 becomes 61,000 t Go,aut old New Budget Budget time un 3000 3050 Go, - o

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Answer #1

quiw ou ray #1 MRS= -20 MRS = -16. Cas in al.) Before consumer receives the gift card Budget constraint was! Bl! 20x+y = 60.0LLIANO I starting from highest A ( 33:5, 60,000) IC point. the 20( 33.5) + 60.000 = 60000 This is not nossible this point doe

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