6) Consider Jackie's consumption of ice cream and cake. Suppose that the price of a pint...

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6) Consider Jackie's consumption of ice cream and cake. Suppose that the price of a pint of ice cream is P₁ = 2, the price of a slice of cake is Pc = 4 and Jackie's budget for ice cream and cake is given by I = 20. Write an expression for Jackie's budget constraint, given these values. b. Draw Jackie's budget line for ice cream and cake, placing ice cream on the x-axis and cake on the y-axis. Be sure to label the y-intercept, the x-intercept and the slope. c. Suppose the price of ice cream increases to $4 per pint. Draw Jackie's new budget line and label the new intercept(s) and slope. d. Suppose Jackie's optimal consumption bundle was initially 3 slices of cake and 4 pints of ice cream. After the price of ice cream increased, Jackie's optimal bundle changed to 4 slices of cake and 1 pint of ice cream. i. Plot these consumption bundles on the graph and draw the indifference curves associated with each bundle. (Assume diminishing marginal utility for both goods.) ii. What is the marginal rate of substitution between ice cream & cake when Jackie is consuming 3 slices of cake and 4 pints of ice cream? e. Using the information above, sketch Jackie's individual demand curve for ice cream. Be sure to plot two specific points on the curve and label the graph fully. 6) Consider Jackie's consumption of ice cream and cake. Suppose that the price of a pint of ice cream is P₁ = 2, the price of a slice of cake is Pc = 4 and Jackie's budget for ice cream and cake is given by I = 20. Write an expression for Jackie's budget constraint, given these values. b. Draw Jackie's budget line for ice cream and cake, placing ice cream on the x-axis and cake on the y-axis. Be sure to label the y-intercept, the x-intercept and the slope. c. Suppose the price of ice cream increases to $4 per pint. Draw Jackie's new budget line and label the new intercept(s) and slope. d. Suppose Jackie's optimal consumption bundle was initially 3 slices of cake and 4 pints of ice cream. After the price of ice cream increased, Jackie's optimal bundle changed to 4 slices of cake and 1 pint of ice cream. i. Plot these consumption bundles on the graph and draw the indifference curves associated with each bundle. (Assume diminishing marginal utility for both goods.) ii. What is the marginal rate of substitution between ice cream & cake when Jackie is consuming 3 slices of cake and 4 pints of ice cream? e. Using the information above, sketch Jackie's individual demand curve for ice cream. Be sure to plot two specific points on the curve and label the graph fully.