Business Economics Question

Paul loves hot drinks, and he has a part of his weekly budget earmarked for buying them. In the diagram below; you can find a budget line that represents how much tea and coffee Paul can afford within his budget for hot drinks and an example of an indifference curve. a} Brieffy explain what exactly this indifference curve conveys. An indifference curve represents the combinations of goods and services that a consumer is indifferent to, each combination on an indifference curve gives the consumer the same total satisfaction an indifference curve is normally drawn as convex to the origin. This reflects the assumption of the law of diminishing marginal satisfaction .f marginal utility. i.e., as we consume extra units of something; the extra utility falls, total utility rises at a diminishing rate. Combinations of products on an indifference curve further from the origin are assumed to give greater total utility. In} Use the given diagram to determine the price for a cup of coffee if the price for a cup of tea is 1? e] Amend the diagram suitably such that you can find Paul's optimal choice of coffee and tea consumption for his given budget for hot drinks