2. You have $100 to spend on food and clothing. The price of food is $5 per unit and the price of clothing is $10. a. Graph your budget constraint. b. Suppose the government subsidizes clothing so that clothing is half price up to the first 5 units of clothing. Graph your new budget constraint.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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2. You have $100 to spend on food and clothing. The price of food is $5 per unit and the price of
clothing is $10.
a. Graph your budget constraint.
b. Suppose the government subsidizes clothing so that clothing is half price up to the first 5 units
of clothing. Graph your new budget constraint.
Transcribed Image Text:2. You have $100 to spend on food and clothing. The price of food is $5 per unit and the price of clothing is $10. a. Graph your budget constraint. b. Suppose the government subsidizes clothing so that clothing is half price up to the first 5 units of clothing. Graph your new budget constraint.
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