Consider the figure below, which shows the budget constraint and the indifference curves of good King Zog. Zog is in equilibrium with an income of $300, facing prices pX = $4 and pY = $10.

(a) How much X does Zog consume?
(b) If the price of X falls to $2.50, while income and the price of Y stay constant, how much X will Zog consume?
(c) How much income must be taken away from Zog to isolate the Hicksian income and substitution effects (i.e., to make him just able to afford to reach his old indifference curve at the new prices)?
(d) The total effect of the price change is to change consumption from the point________ to the point ________.
(e) The income effect corresponds to the movement from the point _____ to the point _____ while the substitution effect corresponds to the movement from the point ____ to the point ____.
(f ) Is X a normal good or an inferior good?
(g) On the axes below, sketch an Engel curve and a demand curve for Good X that would be reasonable given the information in the graph above. Be sure to label the axes on both your graphs.

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