A recent newspaper circular advertised the following special on tires: "Buy three, get the fourth tire for free - limit one free tire per customer." Each tire usually sells for $50.
(i) Given this information, draw the budget line for a customer who has $500 to spend on tires and other goods.
(ii) Does this offer has the same effect in purchasing of tires that would occur if a simply a 25 percent reduction in the price of tire? Draw the budget line for price reduction.