Options for all of them: blue one, red one, neither blue or red4th option: homthetic preference, quasilinear preference, revealed preference **Text Description:**Consider a person who is endowed with 10 units of P and 10 units of G.- If you observe the person not buying or selling Good P and G, the person’s BL is the [Select].- If you observe the person selling G and using the proceeds to buy P, the person’s BL is [Select].- If you observe the person selling P and using the proceeds to buy G, the person’s BL is [Select].- This is an example of [Select].**Graph/Diagram Explanation:**The graph below the text illustrates a budget line (BL) and indifference curves (IC) in a standard microeconomic setting. The axes represent the quantities of two goods: Good P on the vertical axis and Good G on the horizontal axis.1. **Endowment Point (10, 10):** The initial endowment point is marked at (10, 10), meaning the person starts with 10 units of Good P and 10 units of Good G.2. **Budget Lines:** - The initial budget line is shown in blue. - A red budget line indicates the situation where the person has sold some units of G to buy more units of P. - A different budget line is likely implied where the person sells units of P to purchase G.3. **Indifference Curves:** - IC₁, IC₂, and IC₃ represent different levels of utility. - Each indifference curve shows combinations of Good P and Good G that provide the same level of satisfaction to the person. - The higher the indifference curve (further from the origin), the higher the level of utility.4. **Points on the Graph:** - Point W denotes an intersection on the blue budget line. - Point S marks a spot on the x-axis, indicating a certain amount of Good G being consumed. - Point T is marked on the horizontal axis, indicating the full consumption of Good G under one scenario. - Point X shows another combination of goods on the red budget line.This graph and the corresponding choices demonstrate the decision-making process in terms of exchanging or maintaining goods, reflecting concepts such as opportunity cost and preference satisfaction. The example might illustrate a consumer choice theory problem or a budget constraint adjustment scenario.

We will answer the first three subparts only. Please resubmit the other part separately in case you want it to be answered as well.Given the initial endowment, the person is at point A on the red budget line. If he does not indulge in either buying or selling good P and G then this becomes his equilibrium point. Answer: Red oneIf the person sells G and uses the proceeds to buy P then his endowment of G will reduce while endowment of P will increase. So he will move from point A to point B on the blue BL. Answer: Blue oneNow if the person sells P and buys G then new equilibrium will be point C on the blue BL. Answer: Blue one