Please assist with the given problems. Provide diagrams and step by step calculations.
Josh has $100 available for school supplies, S, and food, F, from Meijer (Local general merchandise store). The price of each unit of school supplies is $1 and each unit of food is $1. Josh spends $10 on 10 units of school supplies and $90 on 90 units of food.
1) Draw the budget constraint. (Put School supplies, S, on the X axis and Food, F, on the Y axis). Draw the indifference curve that includes (S = 10, F = 90). S and F are imperfect substitutes.
2) Meijer sends you a coupon for $20 which can be used only for school supplies. Draw the new budget constraint. Is Josh better off? Would he prefer a general $20 coupon (can be used for school supplies or food) to the school supply coupon? Show this on your graph. (Be sure that your graph is consistent with your answer.)