Assume That the Budget Constraint in Figure 7

question 8

Essay

Assume that the budget constraint in Figure 7.1 panel A is: P_EE +P_AA = I,where I is total income and _PE is the price of education and P_A is the price of all other goods.If U(E,A)= A+E,P_E = 2,P_A = 1,and I = 10 what is the quantity of education and all other goods consumed?
-If the price of education drops to 1,how much of the two goods are consumed now?

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