# 1: (20 points) Wendy drinks 10 sugary drinks and 4 smoothies a week. Smoothies are $5 each and sugary drinks were $2 each. This week, things are different: the government has slapped a tax on sugary drinks and their price has doubled to $4. But it's not all bad news for Wendy. The government has also revised the income tax, so Wendy's drinks budget has increased. She can now just afford to buy her usual 10 sugary drinks and 4 smoothies a week. a. What was Wendy's drinks (sugary drinks and smoothies) budget last week and what is it this week? b. What was Wendy's opportunity cost of a sugary drink last week and what is it this week? c. Does Wendy buy 10 sugary drinks and 4 smoothies this week? Explain. d. Draw Wendy's budget line for drinks for last week by taking smoothies on vertical axis and sugary drinks on horizontal axis. What is the slop of budget line? e. Draw Wendy's budget line for drinks for this week on the same graph. How the new budget line is different from the old one