Alisa consumes only cellos (X) and cello bows (Y). These goods are perfect complements for Alisa, in a one-to-one ratio.

Alisa consumes only cellos (X) and cello bows (Y). These goods are perfect complements for Alisa, in a one-to-one ratio.

a. Suppose the price of a cello is $50,000 and the price of a bow is $10,000. Draw three budget constraints for Alisa corresponding to her annual income being $60,000, $120,000, and $180,000. Sketch in her indifference curves (remember: perfect complements) and show the optimal bundle she would choose on each of the three budgets.

b. Draw Alisa’s Engel curve for cellos based on the information from part (a).

c. Now suppose Alisa’s income is fixed at $120,000, and bows still cost $10,000 each. Draw the three budget constraints corresponding to the price of a cello being $20,000, $30,000, and $50,000. Sketch in her indifference curves and show the optimal bundle she would choose on each of the three budgets.

d. Draw Alisa’s demand curve for cellos based on the information from part (c).

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