A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10 and price of shoes is $ 20. Assume the consumers budget line has shoes on the vertical axis and sweaters on the horizontal axis;
a. Determine the slope and the intercept of the budget line
b. What will be the effect of the following on the budget line:
Increase in price of sweaters
Increase in income of consumer
If price of a shoes decreases to $ 10 what is the new intercept of the budget line
