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Q. Suppose Mr Govinda has Rs 100 which he can spend on cold drinks & chips and the prices of cold drinks & chips are

Q. Suppose Mr Govinda has Rs 100 which he can spend on cold drinks & chips and the prices of cold drinks & chips are 25 and 12.5 respectively. After some time, as a result of technological changes, the prices of the 2 products have changed to 15 each but Govinda's disposable income has gone down to 90. Please draw a graph (to scale) and show his old and new budget constraints. Prior to the price change Govinda had bought 2 cold drinks & 4 chips. Based on the concept of revealed preferences, please show on the same graph what is the likely range of his choice after the price change.

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