b.) Suppose that the price of gumballs falls to 25 cents. Draw the new budget constraint, original budget constraint from a.) and original indifference curve from a.) in a new graph. Draw a new optimal in indifference curve such that gumballs and sticky hands are substitutes and sticky hands are a normal good.

Principles of Economics (MindTap Course List)
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ISBN:9781305585126
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Chapter21: The Theory Of Consumer Choice
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1. Suppose that you have an income of $10 to spend on sticky hands and gumballs. Both cost $1.00.

a.) Solve for the budget constraint, using gumballs as your x variable. Graph the budget constraint. Draw an indifference curve such that the optimal consumption bundle is 5 gumballs and 5 sticky hands.

b.) Suppose that the price of gumballs falls to 25 cents. Draw the new budget constraint, original budget constraint from a.) and original indifference curve from a.) in a new graph. Draw a new optimal in indifference curve such that gumballs and sticky hands are substitutes and sticky hands are a normal good.

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