QUESTION

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4. Oscar consumes two goods, wine and cheese. His weekly income is $\$ 500$. a. Describe Oscar's budget constraints under the following conditions: - Wine costs $\$ 10 /$ bottle, cheese costs $\$ 5 /$ pound; - Wine costs $\$ 10 /$ bottle, cheese costs $\$ 10 /$ pound; - Wine costs $\$ 20 /$ bottle, cheese costs $\$ 10 /$ pound; - Wine costs $\$ 20 /$ bottle, cheese costs $\$ 10 /$ pound, but Oscar's income increases to $\$ 1,000 /$ week. b. What can you conclude by comparing the first and the last of these budget constraints?

Public Answer

S28ECA The First Answerer