1. My wife is a true woman of south and believes that any good breakfast includes grits (which she loves) and bacon (which I love). Imagine that allocate $60 per week to the consumption of grits and bacon. Grits cost $2 per box and bacon cost $3 per package.

Use a graph boxes pf grits on the horizontal axis and packages of bacon on the vertical axis to answer the following:

a. Illustrate my family's weekly budget constraint.

b. How would your graph change if a sudden decrease in hogs caused the price of bacon to rise to $6 per package?

c. How does this change the opportunity cost of bacon and grits?

2. The government plans to start a food stamp program. The government would issue $100 of food stamp (which can be used only for food) to a needy family.

a. Draw the budget constraint before the food stamp program with food on the horizontal axis and "all other goods" on the vertical. The family has an income of $1,000.

b. How would the budget constraint change when the program is implemented (the stamps are issued)?

3. Consider a utility function U(

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