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Need help with calculating budget constraints. Rumi has $100 and is deciding how to Spend it on bread and wine. The price of bread is

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Need help with calculating budget constraints.

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Rumi 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.) Write down the budget constraint in terms of axl + bxz = c, where an is quantity of bread and x2 is quantity of wine. (Since this is a linear equation, you could scale a. b, and c by an arbitrary scalar. In this and subsequent questions, just let 0 be the total budget in dollars.) Suppose the price of wine drops from $2 to $1 when a new source of grapes is found in Tashkent. Write down the new budget constraint. (1: Use the original prices ($2 for both bread and wine), but suppose that Rumi's income increases from $100 to $200 when he earns the patronage of the shah. Write down the new budget constraint. 0: Again return to the first budget constraint. Now suppose the government wants consumers to conserve bread, so it changes the price of bread to $4 for each purchase of 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 isjust a way to check that you have constructed the constraint correctly.)

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