Problem: A consumer must divide $250 between teh consumption of product X and product Y. The relevant market prices are Px= $5 and Py= $10.
1. Write the equation for the consumers budget line.
2. Illustrate the consumers oppurtuinity set in a carefully labeled diagram.
3. Show how the consumers opportuinity set changes when the price of good X increases to $10. How does this change alter the market rateof subsitution between X and Y?