Problem
Amy has $12 a week to spend on coffee and soda. The price of coffee is $2 a cup, and soda is $1 a can. Use this information to work Problems 1 4
1. Draw a graph of Amy's budget line. Can Amy buy 7 cans of soda and 2 cups of coffee a week? Can she buy 7 cups of coffee and 2 cans of soda a week? What is the relative price of a cup of coffee?
2. Suppose that the price of soda remains at $1 a can but the price of coffee rises to $3 a cup. Draw Amy's new budget line. If she buys 6 cans of soda, what is the maximum number of cups of coffee she can buy in a week? Has the relative price of coffee changed?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.