a.Diagram 1 shows alternative indifference curves (IC₁ and IC₂) and budget constraint lines (BC₁, BC₂, BC₃) for Jennifer who enjoys consuming tacos with soda. Based on the Budget Constraint BC₁, if the consumer's income is $28, what is the price of a taco and a can of Pepsi?

b.With BC₁, what combination of tacos and Pepsi quantities maximizes this consumer's satisfaction?

c.At point (4,3) what is the marginal rate of substitution (MRS_xy) between the two products?

d.Assume the new budget line is BC₃. What has changed from BC₁ with the prices of soda and/or taco, and the new consumer equilibrium? What combination of tacos and Pepsi quantities optimizes the consumer's utility?

e.Explain the possible specific reasons for the shift of the budget constraint from BC₁ to shift to BC_2.