Ned buys goods X and Y. He can just afford the bundle X = 4 and Y = 4. He can also afford X = 6 and Y= 3. Each of these bundles exhausts his income. For full credit, show all necessary work to answer the questions below.
What is the ratio of the price of x to the price of y?
Write an equation that gives you Ned's budget line.
If Ned spent all his money on x, how much x could he buy? If he spent all your money on
y, how much y could she buy?
Draw Ned’s budget line.
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