(b) Assume that a consumer has RM5,000 to spend between goods X and Y. Given that the...
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Question:
(b) 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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