Answer to Question #142073 in Microeconomics for asheeka stewart

Question

suppose eve allocates $3000 of her monthly income to the purchase of cheese cakes and soda of which she receives a marginal utility of 1200 for cheese cake and 400 for soda
illustrate eves budget lines when the price of cheese cake increases by $100

Answer 1

Because of increase in price of cheese cakes. Eves budget line 1 will move inwards forming new budget line 2