Suppose for Donnie, cookies and milk are perfect complements

Subject:EconomicsPrice: Bought3

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Suppose for Donnie, cookies and milk are perfect complements. For every cookie he eats, he wants one glass of milk. Suppose his allotted income for cookies and milk is $12 per week, the price of cookies is $4 per cookies, and the price of milk is $2 per glass.

A) Putting milk on the vertical axis and cookies on the horizontal axis, draw Donnie's budget constraint and three indifference curves.

B) Indicate on the graph Donnie's best feasible bundle.

C) Suppose the price of cookies decreases to $2 per cookie. Draw the new budget constraint and his next best feasible bundle.