Jennifer spends all her income on two goods, X and Y. In Year 1, P_X = $15 and P_Y = $24, and at her utility-maximizing equilibrium she bought 20X and 30Y. In Year 2, the price of X decreases to $6 and the price of Y increases to $30. Assuming that Jennifer’s tastes and income do not change, use budget constraints and indifference curves to figure out whether she is better off or worse off than she was in Year 1. Label ALL intercepts and be neat!

Answer rating: 100% (QA)

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