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[Solution] A consumer has $400 to spend on goods X and Y. The market prices of these two goods are P_x=,) 10$ and P_y=,) 40$. a. What is the market rate

Question: A consumer has $400 to spend on goods $X$ and $Y$. The market prices of these two goods are $P_{x}=\$ 10$ and $P_{y}=\$ 40$.

$a$. What is the market rate of substitution between goods $X$ and $Y ?$

b. Illustrate the consumer's opportunity set in a carefully labeled diagram.

c. Show how the consumer's opportunity set changes if income increases by $400. How does the $400 increase in income alter the market rate of substitution between goods $X$ and $Y$ ?

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[Solution] A consumer has $400 to spend on goods X and Y. The market prices of these two goods are P_x=,) 10$ and P_y=,) 40$. a. What is the market rate

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