Maria's food and clothing consumption. Ten years ago, Maria had an income of 40 which she spent entirely on clothing (18 units) and food (22 units)....
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# Consumption Graph and Income Levels: Help needed with question a and b alt="Screen Shot 2019-09-23 at 8.58.10 PM.png" /> ATTACHMENT PREVIEW Download attachment Screen Shot 2019-09-23 at 8.58.10 PM.png I 4. Maria's food and clothing consumption. Ten years ago, Maria had an income of 40 which she spent entirely on clothing (18 units) and food (22 units). Currently Maria has an income of 56 which she spends entirely on clothing (28 units) and food (14 units). Ten years ago, the price of food was 39; = 1 and the price of clothing was 336 = 1. Today, the price of food is pf = 1.75, whereas the price of clothing is in,3 = 1.12. (a) Plot Maria’s choices on a graph with quantity of clothing (horizontal axis) and quantity of food (vertical axis). Indicate Maria’s budget constraint in each period as well as her optimal choice. (b) Comparing income levels, can we tell whether Maria is better oﬂ' or worse off at time 2 than at time 1? Why or why not? (Hint: draw indifference curves that are consistent with A and B being optimal choices.)

tel I = 40
food
optional
Pp = 1
bund ( 18, 22 )
40 1
Pe = 1
22
( 18 22 )
18
40
clothing
food
(=2 1 = 56
optimal
PR = 1,75
bundle ( 28 , 14 )
Pe = 1,12
32
28
F ...
( 14 , 28)
14
50 clothing
8 )...

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