Question: At prices ($4, $12), Harry chooses the bundle (9, 4). At the prices ($8, $4), Harry chooses the bundle (2, 9). a. Plot the budget

At prices ($4, $12), Harry chooses the bundle (9, 4). At the prices ($8, $4), Harry chooses the bundle (2, 9).

a. Plot the budget lines for these two optimal choices.

b. Is this behaviour consistent with the weak axiom of revealed preference?

c. Explain the importance of the idea of revealed preferences to making economic policy in the real world, providing an illustration to support your answer.

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