Question: Over the past decade medical costs have increased more rapidly than other prices. In order to illustrate how rising medical costs have affected consumer alternatives, let X represent the quantity of medical services, and let Y represent the quantity of other goods. Furthermore, let income M be measured in hundreds of dollars, the price of medical services and other goods in terms of dollars per minute, with M = 100, \({{P}_{x}}=4\) and \({{P}_{y}}=5\)

a. Graph the budget line, and determine the market rate of substitution.

b. Illustrate the budget set.

c. Show in your graph what happens to the budget constraint if ^Px increases to $10.

d. What is the meaning of the slope of the two budget constraints?