Question

A company considers a package to help employees with the running costs of their cars.It considers two options :
A.to offer fixed amount of money towards the use of the car in addition to a cost-free usage for the first X0 miles;
B.to participate in the actual cost of running the car(i.e. pay a certain amount,a0,per mile used)

a)let X represents mileage of car usage and Y all other goods.Draw each of the options while analyzing the individual's response to the proposed change(i.e.discuss the income and substitution effects);