2.2 Have your folks given you cash or promised to leave you money after they’re gone? If so, your parents may think of such gifts as a good. They must decide whether to spend their money on fun, food, drink, cars, or on transfers to you. Hmmm.

Altonji and Villanueva (2007) estimated that, for every extra dollar of expected lifetime resources, parents give their adult offspring between 2¢ and 3¢ in bequests and about 3¢ in transfers. Those gifts are about one-fifth of what they give their children under 18 and spend on college. Illustrate how an increase in your parents’ income affects their allocations between bequests to you and all other goods (“fun”) in two related graphs, where you show an income-consumption curve in one and an Engel curve for bequests in the other. (Hint: See Solved Problem 5.2.)