Suppose that you consume nothing but beer and pizza. In 2010, your income is $10 per week, beer costs $1 per bottle, pizza costs $1 per slice, and you buy 6 bottles of beer and 4 slices of pizza per week. In 2011, your income rises to $20 per week, the price of beer rises to $2.50 per bottle, and the price of pizza rises to $1.25 per slice.
a. In which year are you happier?
b. In which year do you eat more pizza? Justify and illustrate your answer with indifference curves.