Ms. Mills consumes curds and whey. The initial price of curds is $1 per unit, and the price of whey is $1.50 per unit. Ms. Mill's income is $12.

a. What is the relative price of curds?(1 marks)

b. Derive Ms. Mill's budget equation and draw her budget line on a graph. (Measure curds on the horizontal axis.) (6 marks)

c. On your graph, draw an indifference curve so that the best affordable point corresponds to 6 units of curds and 4 units of whey. (4 marks)

d. What is the marginal rate of substitution of curds for whey at this point?(3 marks)

e. Show that any other point on the budget line is inferior.(1 mark)