Question: A consumer is at equilibrium at one of the 4 points (A, B, C, or D) shown below.

a. If we know that the consumer is maximizing his/her utility, and that the price of Skittles is not the same as the price of M&M’s, at what point is the consumer operating? Explain your logic.

b. If the price of M&M’s is $.50 each, what is the income of the consumer described above? Explain.

c. How much does the consumer spend on M&M’s? On Skittles? Explain your logic.

d. What is the price of Skittles for this consumer? Explain how you reached your answer.