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1 7 . A college student has two options for meals: eating at the dining hall for $ 6 per meal, or eating a Cup
A college student has two options for meals: eating at the dining hall for
$
per meal, or eating a Cup O Soup for
$
per meal. His weekly food budget is
$
a Draw the budget constraint showing the tradeoff between dining hall meals and Cups O Soup. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A b Suppose the price of a Cup O Soup now rises to
$
Using your diagram from part a show the consequences of this change in price. Assume that our student now spends only percent of his income on dining hall meals. Label the new optimum as point
B
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