1. 5.3 Felix chooses between clothing, q1, and food, q2.

His initial income is $1,000 a month, p1 = 100, and p2 = 10. At his initial bundle, he consumes q1 = 2 and q2 = 80. Later, his income rises to

$1,200 and the price of clothing rises to p1 = 150, but the price of food does not change. As a result, he reduces his consumption of clothing to one unit.

Using a revealed preference reasoning (that is, know ing nothing about his indifference curves), can you determine how he ranks the two bundles?

6. Challenge