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6. Graduate students at University of Massachusetts consume only two goods: rental apartment space (good x) and sandwiches (good y). 2020: I= $3,000 Px = $4 Py = $6 %3D 2021: I= $3,300 Px = $5 Py = $6 Assume, in each year, all graduate students have the same income and face the same prices for apartments and sandwiches. However, graduate students have different preferences for apartments and sandwiches, but each student's preferences are consistent from year to year. Assume also that each student chooses his most preferred bundle given his budget set in each year. Denote the bundle in 2020 by (xp, Yo) and this year's bundle by (x, y,). What are the equations for their budget constraints in 2020 and 2021? а. b. What combination (bundle) of apartments and sandwiches is on graduate students' budget constraints in 2020 and 2021? On a carefully labeled graph with square feet on the horizontal axis, draw the с. budget constraints. Which students are better off this year, compared to last year? Which students

6. Graduate students at University of Massachusetts consume only two goods: rental apartment space (good x) and sandwiches (good y). 2020: I= $3,000 Px = $4 Py = $6 %3D 2021: I= $3,300 Px = $5 Py = $6 Assume, in each year, all graduate students have the same income and face the same prices for apartments and sandwiches. However, graduate students have different preferences for apartments and sandwiches, but each student's preferences are consistent from year to year. Assume also that each student chooses his most preferred bundle given his budget set in each year. Denote the bundle in 2020 by (xp, Yo) and this year's bundle by (x, y,). What are the equations for their budget constraints in 2020 and 2021? а. b. What combination (bundle) of apartments and sandwiches is on graduate students' budget constraints in 2020 and 2021? On a carefully labeled graph with square feet on the horizontal axis, draw the с. budget constraints. Which students are better off this year, compared to last year? Which students

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**6. Graduate students at the University of Massachusetts consume only two goods: rental apartment space (good x) and sandwiches (good y).** **2020:** - Income (I) = $3,000 - Price of x (\(P_X\)) = $4 - Price of y (\(P_Y\)) = $6 **2021:** - Income (I) = $3,300 - Price of x (\(P_X\)) = $5 - Price of y (\(P_Y\)) = $6 Assume, in each year, all graduate students have the same income and face the same prices for apartments and sandwiches. However, graduate students have different preferences for apartments and sandwiches, but each student’s preferences are consistent from year to year. Assume also that each student chooses their most preferred bundle given their budget set in each year. Denote the bundle in 2020 by \((x_0, y_0)\) and this year’s bundle by \((x_1, y_1)\). **a.** What are the equations for their budget constraints in 2020 and 2021? **b.** What combination (bundle) of apartments and sandwiches is on graduate students’ budget constraints in 2020 and 2021? **c.** On a carefully labeled graph with square feet on the horizontal axis, draw the budget constraints. **d.** Which students are better off this year, compared to last year? Which students are worse off this year, relative to last year? --- **Detailed Explanation of Diagram (if any):** There are no diagrams provided in the image. For part (c), a graph with square feet as the horizontal axis and sandwiches as the vertical axis should be drawn to illustrate the budget constraints. The budget line for 2020 would be defined by the equation \(4x + 6y = 3000\), and for 2021 by \(5x + 6y = 3300\).
Transcribed Image Text:**6. Graduate students at the University of Massachusetts consume only two goods: rental apartment space (good x) and sandwiches (good y).** **2020:** - Income (I) = $3,000 - Price of x (\(P_X\)) = $4 - Price of y (\(P_Y\)) = $6 **2021:** - Income (I) = $3,300 - Price of x (\(P_X\)) = $5 - Price of y (\(P_Y\)) = $6 Assume, in each year, all graduate students have the same income and face the same prices for apartments and sandwiches. However, graduate students have different preferences for apartments and sandwiches, but each student’s preferences are consistent from year to year. Assume also that each student chooses their most preferred bundle given their budget set in each year. Denote the bundle in 2020 by \((x_0, y_0)\) and this year’s bundle by \((x_1, y_1)\). **a.** What are the equations for their budget constraints in 2020 and 2021? **b.** What combination (bundle) of apartments and sandwiches is on graduate students’ budget constraints in 2020 and 2021? **c.** On a carefully labeled graph with square feet on the horizontal axis, draw the budget constraints. **d.** Which students are better off this year, compared to last year? Which students are worse off this year, relative to last year? --- **Detailed Explanation of Diagram (if any):** There are no diagrams provided in the image. For part (c), a graph with square feet as the horizontal axis and sandwiches as the vertical axis should be drawn to illustrate the budget constraints. The budget line for 2020 would be defined by the equation \(4x + 6y = 3000\), and for 2021 by \(5x + 6y = 3300\).
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