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# Problem 1: Slide #1 figure: A consumer is initially in equilibrium at point C. The consumer's income is \$300, and the budget line through point C is...

Problem 1:
Slide #1 figure:  A consumer is initially in equilibrium at point C.
The consumer's income is \$300, and the budget line through point C is given by
\$300 = \$50X + \$100Y.  When the consumer is given a \$50 gift certificate that is good
only at store X, she moves to a new equilibrium at point D.
a. Determine the prices of goods X and Y.
b. How many units of product Y could be purchased at point A?
c. How many units of product Y could be purchased at point E?
d. How many units of product Y could be purchased at point B?
e. How many units of product Y could be purchased at point F?
f. Based on this consumer's preferences, rank bundles A, B, C, and D
in order from most preferred to least preferred.
g. Is product X a normal or an inferior good?
Please see attached for full question.

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