A,B,C,D

Suppose that the consumer whose preferences are illustrated by the graph below has an income M = 1T5{}C$ and that the price of the two goods he consumes is respectively Px = 35 C$ and Py = 10 055. Answer the following questions using the information in Figure 2. Figure 2 . Which point in Figure 2 corresponds to this consumer's optimal consumption basket? Explain your answer clearly. b. Define and calculate the marginal rate of substitution (TMS) at this point. C. If this same consumer now has an income equal to C$700 and faces prices F'X = C$14 and Py = C182, what is his new optimal consumption basket? Justify your answer. d. Imagine that this consumer is at point D. What is his income if P1 =10 C$