1. The problem asks to illustrate the effect of change in price and wealth on consumer choice and state the restrictions on comparative statics. 2. Consumer choice is typically analyzed using a budget constraint and indifference curves. The budget constraint is given by $$p_x x + p_y y = W$$ where $p_x, p_y$ are prices of goods $x$ and $y$, and $W$ is wealth. 3. When price changes, the budget line pivots. For example, if $p_x$ decreases, the budget line becomes flatter, allowing more $x$ to be purchased for the same wealth. 4. When wealth changes, the budget line shifts parallel outward (if wealth increases) or inward (if wealth decreases), allowing more or less consumption of both goods. 5. Restrictions on comparative statics include: - Preferences must be stable and well-behaved (convex, monotone). - Prices and wealth changes are considered ceteris paribus (other factors constant). - The consumer maximizes utility subject to the budget constraint. 6. Diagrammatically, the initial budget line and indifference curve intersect at the optimal choice. A price decrease pivots the budget line outward, changing the optimal bundle. A wealth increase shifts the budget line outward parallelly, changing the optimal bundle. 7. The Slutsky equation decomposes the effect of a price change into substitution and income effects, which are key to understanding comparative statics. 8. Final answer: Changes in price pivot the budget line, changes in wealth shift it parallelly, and consumer choice adjusts accordingly under the assumptions of stable preferences and ceteris paribus conditions.