Suppose a consumer has a monthly budget of $200 for entertainment. The consumer likes two activities (both normal goods): Golfing and going to the Movies. Golfing costs $25 per round and a trip to the Movies is $20. 

a). Illustrate the consumer's budget constraint. What is the slope? What is the intuition behind this number (that is, explain in words what it means)? 

b). Briefly explain the concept of an indifference curve. On the graph you created for part (a), add a "family" of indifference curves that represent the consumer's preferences over Golf and Movies for several values of utility. The indifference curves can be stylized and generic (if we had more time, we could compute them from an explicit utility function). Finally, indicate the consumer's optimal combination of Golf and Movies based upon the budget constraint and your stylized indifference curves. 

c). Illustrate (on two separate graphs) and explain (in terms of income and substitution effects) how the optimal combination of Golf and Movies changes when 

1). The consumer's budget increases to $300 per month 

2). The price of Golf increases to $40 per round (but budget remains $200/month).