Question
Connie has a monthly income of $200 which she allocates among two goods: meat and potatoes. (a) Suppose meat costs $4 per pound and potatoes
Connie has a monthly income of $200 which she allocates among two goods: meat and potatoes.
(a) Suppose meat costs $4 per pound and potatoes cost $2 per pound. Draw her budget constraint.
(c) Connie's supermarket has a special promotion. If she buys 20 pounds of potatoes (at $2 per pound), she gets the next 10 pounds for free. This offer applies only to the first 20 pounds she buys. All potatoes in excess of the first 20 pounds (excluding bonus potatoes) are still $2 per pound. Draw her budget constraint.
I am confused about c) on how to draw the budget line. Please help!
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