A. If the prices of all products are raising at 5 percent per year and your employer gives you a 5 percent salary increase, are you better off, worse off, or equally well off in comparison with your situation a year ago? Use indifference curve analysis to explain your answer.
B. Instead, if the prices of all products are rising at 5 percent per year and your employer gives you a 10 percent salary increase, are you better off, worse off, or equally well off in comparison with your salary a year ago? Use indifference curve analysis to explain your answer.