Problem
A consumer must divide $250 between the consumption of product X and product Y. The relevant market prices are Px $5 and Py $10.
I. Write the equation for the consumer's budget line.
II. Illustrate the consumer's opportunity set in a carefully labeled diagram.
III. Show how the consumer's opportunity set changes when the price of good X increases to $10. How does this change alter the market rate of substitution between goods X and Y?