Answer
Please see the first graph for the income increase from 3 thousand dollars to 4 thousand dollars with both goods as normal goods.
The second budget constraint curve shows increased consumption of both cheese and wine.
Work Step by Step
Please see the first graph for the income increase from 3 thousand dollars to 4 thousand dollars with cheese as an inferior good.
The second budget constraint curve shows an increase in equilibrium wine consumption and a very small increase in the equilibrium cheese consumption.
