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  3. 2 john has a 500 monthly budget for meals m...

Question: 2 john has a 500 monthly budget for meals m...

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2. John has a $500 monthly budget for meals (M) and books (B). The price of meal is $10, and the price of a book is $100. Use a separate graph for each part below and plot meals on the horizontal axis and books on the vertical axis. Label all axes, intercepts and possible kink points, and treat each case separately. a. Draw Johns budget constraint for meals and books. (5 points) b. Draw Johns budget constraint if now his favorite (and only) restaurant raises the price of a meal to S12 after 25 meals, and again to $15 after 40 meals. (Yes, this is weird but lets run with it!) (10 points) Draw Johns budget constraint if now he receives $150 in meal subsidies and $200 in book subsidies from his University. Meal subsidies can only be spent on meals, and book subsidies can only be spent on books. (10 points) c.
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