Suppose your weekly mother’s income is $600 per week. She likes to buy books from Barnes and Nobles, and clothes from Wal-Mart for Valentines day. Suppose the average book price is $30 and that of clothes is $20. On Valentine’s Day, you have given her two gift certificates: a $20 certificate from Wal-Mart to buy clothes and a $30 gift certificate to buy books from Barnes and Nobles. Place books on the Horizontal axis.
A. write down the budget constraint equation. Draw your mother’s budget constraint using the given data and assuming she receives NO certificates.label all points on the axes.
B. Draw the budget constraint when you give her the TWO Gift certificates. Label all the points on the axes.
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