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An individual sets aside a certain amount of his income per month to spend on his two hobbies, collecting wine and collecting books. Given the information below, illustrate the price-consumption line associated with changes in the price of wine.

An individual sets aside a certain amount of his income per month to spend on his two hobbies, collecting wine and collecting books. Given the information below, illustrate the price-consumption line associated with changes in the price of wine.

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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An individual sets aside a certain amount of his income per month to spend on his two hobbies, collecting wine and collecting books. Given the information below, illustrate the price-consumption line associated with changes in the price of wine. Wine Price $10 $20 $40 Book Price $8 $8 $8 Wine 40 20 10 Books 50 50 50 Budget SADO $800 SBDO 1.) Using the line drawing tool, draw a budget line when the price of wine is $10 per bottle. Label this line 1 2.) Using the point drawing tool add the corresponding satisfaction maximizing bundle. Label this point 'A'. Carefully follow the instructions above, and only draw the required objects. 3.) Using the line drawing lool, draw a budget line when the price of wine is 520 per bolle. Label this line L 4.) Using the point drawing tool, then add the corresponding satisfaction-maximizing bundle. Label this point 'B'. Carefully follow the matructions above, and only draw the required objecta Books 100- 90- 00- 70 no- 40- 30- 20- 10- 0+ D 10 20 30 40 30 60 70 80 Wine 00 100
Transcribed Image Text:An individual sets aside a certain amount of his income per month to spend on his two hobbies, collecting wine and collecting books. Given the information below, illustrate the price-consumption line associated with changes in the price of wine. Wine Price $10 $20 $40 Book Price $8 $8 $8 Wine 40 20 10 Books 50 50 50 Budget SADO $800 SBDO 1.) Using the line drawing tool, draw a budget line when the price of wine is $10 per bottle. Label this line 1 2.) Using the point drawing tool add the corresponding satisfaction maximizing bundle. Label this point 'A'. Carefully follow the instructions above, and only draw the required objects. 3.) Using the line drawing lool, draw a budget line when the price of wine is 520 per bolle. Label this line L 4.) Using the point drawing tool, then add the corresponding satisfaction-maximizing bundle. Label this point 'B'. Carefully follow the matructions above, and only draw the required objecta Books 100- 90- 00- 70 no- 40- 30- 20- 10- 0+ D 10 20 30 40 30 60 70 80 Wine 00 100
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