Oscar consumes two goods; wine and cheese. His weekly income is 500.

1. Draw on one graph the budget line under the following conditions;
2. Wine costs K10/bottle and cheese costs K5/kg.
3. Wine costs K10/bottle and cheese costs K10/kg
4. Wine costs K20/bottle and cheese costs K10/kg

1. Explain why budget line ii and iii would offer less utility compared to budget line i.

Draw the graph for substitution and income effect of a price fall for an inferior good