Melinda earns $400 a month from her part-time job. She buys only two goods: X and Y. Good X costs $20 each and good Y costs $40 each.

(a)Using a chart, illustrate Melinda's budget constraint.

Good X * Price XGood Y * Price Y

0........... 00........... 0

2...........401........... 40

4...........802........... 80

6........... 1203........... 120

8........... 1604........... 160

10......... 2005........... 200

(b)Give one example of an allocation that is unaffordable for Melinda. Explain why.

(a)Draw a graph of Melinda's budget constraint. Explain how it illustrates the concept of Scarcity.