Question: 1. If a consumer's income doubles and the prices of the two goods that she spends her entire income on also double, what happens to her budget constraint?
2. An hourly paid worker can choose the number of hours per day worked, up to a maximum of 12, and gets paid £10 an hour. Leisure hours are assumed to be any hours not worked out of this 12. On a graph with leisure hours on the horizontal axis and total pay on the vertical axis draw in the budget constraint showing the feasible combinations of leisure and pay that this worker might choose from. Show that the slope of this budget constraint equals -1 multiplied by the hourly wage rate.