Mumi has $100 and is deciding how to spend it on bread and wine. The price of bread is $2 and the price of wine is $2. (Both goods are infinitely divisible.)

Now suppose the government wants consumers to conserve bread, so it changes the price of bread to $4 for each purchase of bread above 25. (For 25 or less units of bread, the original price of $2 is used.)

Draw the budget constraint. What is the area under the new budget constraint?

(Note: We don't ascribe any intuitive meaning to this value. It is just a way to check that you have constructed the constraint correctly.)