a. A consumer has an income of $3,000. Soft Drink costs $3 per glass, and cheese costs $6 per pound.
b. Write an equation for the budget constraint.
c. Draw the consumer's budget line. What is the slope of this budget line?
d. Show what happens to the budget line if the consumer's income increases to $6,000 and the prices remain unchanged. What happened to the slope? Explain.
e. Show what happens to the budget line if the price of Soft Drink increases to $6 while income and the price of cheese remain unchanged. What happened to the slope? Explain.