answer the following questions:

• What kinds of things do you buy on a daily or weekly basis?
• How much do these things cost?
• Do the prices fluctuate, or are the prices usually stable (inelastic)?
• Think about your spending habits in preparation for creating a budget line.

Step 2Graph a budget line.In the same document, use the information gathered in Step 1 to construct a budget line:

• Choose two items that you use on a daily basis and purchase frequently.
• Compare the quantities of each based on how much you can reasonably afford them by using a budget line.

Step 3Analyze the marginal utility.In the same document, analyze the marginal utility using the items and information from Step 2:

• Analyze the marginal utility of the two items when the quantity of these products increases as they become your possessions.
• Then choose a third item that you truly cannot live without. Assess the marginal utility of this item until you reach the point where there is no utility (marginal utility = 0).
• What is the correlation between marginal utility and your demand curve?
• How does marginal utility apply to the paradox of value?
• Include your reaction and response to how constructing the budget line and marginal utility analysis makes you feel about the three items you consume on a frequent basis.