Sarah prefers buying new books to used books. During her first year at school, she spends all her money ($500) on buying new textbooks. The price of new textbooks was $100 while the used books sold for $50 each. When the bookstore announces that there will be a 10% increase in the price of new books with no change in the price of old textbooks, Sarah's father offers her $50 extra to buy books

a) What happens to Sarah's budget line? Illustrate the change with new books on the vertical axis. (write the budget equation and draw the budget line to back up your explanation)

b) Is Sarah worse or better off after the price change? Explain.