Your income is $10 and you buy sodas for $1 apiece. One day a local bully starts demanding that you buy him a soda for every soda you buy yourself. Therefore, it now costs you $2 to get a soda. In these circumstances, you choose to buy 3 sodas a day.

a) Illustrate the bully's effect on your budget line. Illustrate your new optimum. Call it P.

b) One day, the bully announces that he's changed his policy: You now have to buy him 3 sodas a day, regardless of how many you buy for yourself. Illustrate your new budget line. Does it go above, through, or below point P?