Question: Budget Lines:

1. A consumer initially faces the budget line \(p_{1} x_{1}+p_{2} x_{2}=m .\) If the price of good 1 doubles and the price of good 2 triples, does his budget line become steeper or flatter? (putting \(x_{1}\), the amount of good 1, on the horizontal axis). Graph your two budget lines.
2. Suppose that at the new prices described in (a), he could get 3 more units of good 1 by giving up one unit of good 2. If the price of good 1 was originally \(p_{1}=1\), what was the original price of good 2?

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document