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Question: augustin shops at a local food store where he buy...

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Problem 3 (5 points). Augustin shops at a local food store where he buy chocolate bars (c) and bottles of spring water (w) in whole units. His income is $10; chocolate bars normally cost $2 per bar while spring water costs $1 per bottle. (a) One day, he sees a sign at the store offering a special: Bu one chocolate bar, get all combinations one free! No limits per customer. Draw his budget frontier, i-e of c and w that Augustin can exactly afford. Consider c in the horizontal axis and w in the vertical axis. (b) When Augustin returns to the store the next day, he finds that the store has de- cided to change its policy. The sign now says Buy one chocolate bar, get one free! Limit two per customer. Draw his frontier in this case.

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