If Martin income is 20 000 NOK, the price for X1 is 40 NOK and the price for X2 is 20

NOK. Assume Martin is on the budget line and X1 = 250.

Explain what choices Martin faces in the market if he wants more units of

food?

Let A, B, C denote three baskets with different combinations of the two

goods X1 and X2. Say somebody argues that Martin is indifferent among

basket A and B, indifferent among A and C and prefers B to C. Why is this

not according to the rationality assumptions?