Suppose that my favourite lunch includes Fish Tacos at $4.00 each and a pint of 33 Acres Pale Ale at $6.00 a pint. Turns out I can't get enough of either, but I have myself on a strict "Lunch Budget" of $24.00 per day

i.Drawapproximatelyto scale a graph illustrating the budget line given the prices of the two goods - Fish Tacos and 33-Acres Pale Ale. [NOTE: show Fish Tacos on the VERTICAL AXIS and the Pale Ale on the HORIZONTAL AXIS].

ii.I'm deciding between the choices of buying 3 Fish Tacos and 3 Pale Ales; or 3 Fish Tacos and 2 Pale Ales, or 2 Fish Tacos and 2 Pale Ale.WHICHcombination should I choose andWHYin relation to the other two options? [Make sure you carefully explain why or why not for EACH of the three combinations].

iii.Draw an Indifference Curve that is consistent with the preferred combination aboveANDexplainHOWthe

curve drawn conforms to at least 2 of the PROPERTIES REQUIRED of an indifference curve.

iv.Suppose that Fish Tacos are "On Special" today for $2.00 each. What does my NEW budget line look like (add it to the graph already drawn in part i above)? Given this change,ILLUSTRATEandEXPLAINhow much of this change is caused by a "SUBSTITUTION EFFECT" and how much of this change is caused by an "INCOME EFFECT."