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This table contains prices and the demands of a consumer whose behavior was observed in 5...

This table contains prices and the demands of a consumer whose behavior was observed in 5 different price-income situations.

Situation P1 P2 X1 X2
A 2 2 10 70
B 2 4 70 20
C 2 2 20

30
D 6 2 10 30
E 2 4 20 20

A. Sketch each of his budget lines and label the point chosen in each case by the letters A, B, C, D, and E.

B. Is the consumer’s behavior consistent with WARP? Explain.

C. Shade all of the points that you are certain are worse than bundle C.

D. Suppose that you are told that the consumer has convex and monotonic preferences and that he obeys SARP. Shade the points that are at least as good as bundle C.

PLEASE SHOW ALL WORK, NO EXCEL, THANK YOU!

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