Stitution c) A consumer has an income of C50. He can choose any combination of productX
and product Y for consumption. If price of X (Px) is C5 and price of Y (Py) is C2.50
i.
Graph the budget line of the consumer.
ii. Find the market rate of substitution.
iii.
What is the maximum quantity of Y that he can purchase? Show how it
changes when the price of good X decreases from C2.50 to C2 If the income
goes up to €75, then how will the budget line change?
iv.
Find the maximum quantity of Y that he can purchase with the new budget,
(5 mark)

Sri lanka is one of the major tea producing nations in the world. a substantial portion of the country's annual tea production gets exported to various countries, including the united arab emirates, russia, and other countries in the middle east. given the success in these countries, sri lanka decided to foray into the asian market. research evidence indicated that people in myanmar are major consumers of tea and that there is a high demand for tea in that country. this convinced industry experts in sri lanka that exporting to myanmar was a good idea. even though sri lankan tea was priced competitively, sales in myanmar turned out to be far lower than expected. which of the following, if true, could explain this outcome? a. myanmar exported a substantial amount of its annual tea production that year. b. the tea exported from sri lanka is of the highest quality. c. the myanmar government hiked the minimum wage for labor. d. people in myanmar are willing to pay more for their domestic tea brands than for foreign brands. e. sri lankan tea exports to other asian countries like india and china have also not been very successful.