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Assume that a consumer has RM5,000 to spend between goods X and Y. Given that the price of good X is RM120 and the price

Assume that a consumer has RM5,000 to spend between goods X and Y. Given that the price

of good X is RM120 and the price of good Y is RM100. With the aid of a diagram, illustrate

and identify the effects on the consumer's budget line for each of the following conditions:

(i) The consumer's income increases by RM1000. (5 marks)

(ii) The producer of good Y decided to double up the price of each additional unit when

consumers purchase up to 10 units at normal price. (5 marks)

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