Finally, suppose that Luis' employer redesigns the bonus to be a bit more tolerant of unhealthy goods. In particular, Luis employer offers to increase his income by b = 4, as long as the amount of unhealthy good that he selects is smaller than 3. Otherwise his bonus, b = 4 is forfeit. Thus, if he chooses a bundle with n < 3, then his income is 14, but if he chooses a bundle with n> 3, then his income is 10. In this case, there is no rebate. By choosing more than 3 unhealthy goods, Luis simply forfeits the bonus b = 4 (no other penalty). For your convenience, Luis' budget set is shown below