1 Budgets, Indifference Curves, and Preferences Good B Good A (a) Draw a budget line for the following budget equation: 5x3xB=30. (2 point) (b) Draw a small star to mark out the bundle (xA = 0, xB = 10) on your budget line. (1 point) (c) Draw the indifference curve that runs through your starred bundle (0, 10) for a consumer that considers goods A and B to be perfect substitutes. (2 points) (d) Shade in the area of the graph where the bundles are better than the starred bundle. (1 point) (Notice that this bundle is the best affordable bundle on as none of the other bundles on the budget line cross into your shaded area!) 2 Income Changes and the Income-Offer Curve Y (a) Draw two budget lines in the graph below, and label them 1 and 2. Each budget line has the same prices but different income levels. (4 points) For budget line 1, prices px = 1, py = 2, and income m = 6. For budget line 2, prices px = 1,py = 2, and income m = 12.