Economy Questions//HelP!!!!?

Question

Can someone please help me with this economy questions i just cant understand them.

M-Quantity of medical services, O-quantity of other goods purchased by a consumer ina given year, B-Budget- be in thousands of dollars and the price of medical services and other goods be in terms of dollars per unit, with B=60, Pm=6, Po=10.

1.How will the graph look like and what should be the slope?

2.What will be the result if the price of medical services (Po) decreases to $5?

3. How will 2 indifference curves be like in the grapgh that are tangent to the budget line and whats the result??

Thanks to those who helped!!!

Answer 1

1. Given that there will be tradeoffs at the margin (because if you spend all of your budget, you cannot increase consumption of one good without decreasing consumption of the other), the budget line must be negatively sloped.

The slope of the line is equivalent to the ratio of the relative prices.

2. A change in price is both a change in intercept and in slope.

3. Any indifference curve whose slope at the point of tangency is equal to the slope of the budget line will qualify. Ie, find one and then shift its point of intersection.