1. Donna buys goods X and Y. She can just afford the bundle X=6 and Y=11. She can also afford X=12 and Y=8.Each of these bundles exhausts her income
a) Draw Donna's budget line.
b) What is the ratio of the price of x to the price of y?
c) If Donna spent all her money on x, how much x could she buy? If she spent all your money on y, how much y could she buy?
d) Write a an equation that gives you Donna's budget line when the price of x is 1.
2. If Amy spent her entire allowance, she could just afford 8 candy bars and 8 comic books a week. She could also just afford 10 candy bars and 4 comic books. The price of a candy bar is 50 cents. Illustrate her budget line with a diagram (be sure to label x and y-intercepts). What is Amy's weekly allowance?