Alex purchases lamps and books. In 2020, price of books were $4 per book and she purchased 100 books. She also purchases 10 lamps at a price of $10/lamp. a/ sketch an indifference budget line diagram b/ In 2021, the price of books fall to $2 per book while Alex's income unchanged. Add on your sketch in part a. c/ Assume that books are normal good. What does this assumption imply about how many books she purchased in 2021? d/ Suppose in 2022, she decided to share her good fortune by giving her retired father a gift of 200, thus decreasing her income by $200. The price of books remains at $2 and the price of lamps remains at $10.

 Draw new budget constraint. Given that in 2022 the price of books is $2 and the price of lamp is $10 and Alex gives 200 to her father. Would Alex be to consume at the same consumption bundle as she did in 2020? Will she choose to do so? Can she obtain a higher utility at a different consumption?