1. Ralph usually buys one pizza and two colas from the local pizzeria. The pizzeria announces a special: All pizzas after the first one are half-price. Show the original and new budget lines. What can you say about the bundle Ralph will choose when faced with the new constraint
2. Anne is a frequent flyer whose fares are reduced (through coupon giveaways) by 15% after she flies 15,000 miles a year, and then by 30% after she flies 30,000 miles.With composite good Y on the y-axis and number of miles flown on the xaxis, graph the budget line that Anne faces in making her flight plans for the year.
3. B.C. Liquor stores have a special promotion for the world Cup this summer. Anybody who buys 12 cases of beer (at $20 per case) gets the next 2 cases for free! This offer applies only to the first12 cases; additional cases still cost $20 each. Draw Soccer Fan's budget constraint before and after the promotion if his entertainment budget for the world cup is limited to $500.