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Initially, a consumer chooses between water and a composite of other goods. Given her budget and current prices, Manaswini can afford 60 thousand gallons of
Initially, a consumer chooses between water and a composite of other goods. Given her budget and current prices, Manaswini can afford 60 thousand gallons of water a month if she buys nothing else. If she does not purchase water, she can afford 600 units of all other goods. The government begins to ration water, setting a quota of 30 thousand gallons of water a month that a consumer may purchase. How does Manaswini's budget line change? How does her opportunity set change? Part 2 Suppose the price of other goods per month, p Subscript Upper O, is $1.00, the price of water, p Subscript Upper W, is $0.01 per gallon, and the consumer has $600 in income per month. Part 3 Use the line drawing tool to draw the consumer's budget lineLOADING.... Label this line 'Budget line'. Part 4 Carefully follow the instructions above, and only draw the required objects
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