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Work on your own (graded) 1. Jack buys only hot dogs and buns. (a) Jack earns $100, hot dogs cost $4 per package, and buns cost $2 per package. Draw Jack's budget constraint. (b) Suppose Jack receives a 10% raise. Draw his budget constraints 2. Suppose that your income is equal to your wage times the number of hours you worked. Then unexpectedly the government imposes a 25% income tax so that the amount of income leftover for consumption (called disposable income) is 0.75 times your wage times the number of hours you worked. Do you think you would consume more or less? Work more or less? (No, right or wrong answer here, just use the consumer demand to reason through the options.)

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