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Suppose a Consumer Derives Satisfaction from Consuming Two Types of Hamburgers,X

Question 167

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Suppose a consumer derives satisfaction from consuming two types of hamburgers,X and Y.
a.Graph the budget line of the consumer under the assumption that he is offered a "buy two,get one free" deal for burger X (limit one free burger).
b.Graph the budget constraint under the assumption that the producer of burger Y also offers a "buy two,get one free" deal (limit one free burger).
c.Explain in words why each of the preceding budget constraints looks as it does.

Correct Answer:

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a.In Figure 4-6a,ABCD is the budget line...

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