**Problem : **
Kate has $12. Pretzels cost $2 a bag, and soda costs $3 a bottle.
Draw her budget constraint. If soda goes on sale for $2 a bottle, what
does her new budget constraint look like?

**Problem : **
Jeannette has $300. DVD's cost $30 and CD's cost $15. Draw her
budget constraint for DVD's and CD's. Draw her budget constraint if
she has $360.

**Problem : **
J.P.'s indifference curves for beer and movies look like this:

Beer costs $4 and movies cost $6. If J.P. has $24, how much of each will he buy? If you draw in J.P.'s budget constraint, you can see that the optimal point would be at about 2 movies and 3 beers.

**Problem : **
Draw the indifference curves for cashmere sweaters and moth-eaten
sweaters (assuming that moth-eaten sweaters are undesirable and cashmere
sweaters are desirable).

**Problem : **
Lawrence is looking for tables and chairs. His indifference curves
look like this:

He has $500 to spend, how many tables and chairs will he buy if chairs cost $50 and tables cost $100? If you draw in Lawrence's budget constraint, you can see that his optimal combination would be about 3 tables and 4 chairs.

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