Priscilla finds it optimal not to engage in trade at the going prices and just consumes her endowment. Priscilla has no kinks in her indifference curves, and she is endowed with positive amounts of both goods. Use pencil or black ink to draw a budget line and an indifference curve for Priscilla that would be consistent with these facts. Suppose that the price of good 2 stays the same, but the price of good 1 falls.
Use blue ink to show her new budget line. Priscilla satisfies the weak axiom of revealed preference. Could it happen that Priscilla will consume less of good 1 than before? Explain.