Question FourAssume a household with a monthly income of $5,000. This household allocates itsincome to the purchasing of food and nonfood products. If the average price of foodproducts is $20 per unit and nonfood items cost $150 per unit(a) Write the household's budget equation.(b) If this household consumes 100 units of food products, how many units of nonfooditems can it buy?(c) Assume that the price of nonfood products increases to $160. Write the new budgetequation.(d) If this household wants to purchase food and nonfood items in the same proportion asin part (b), what is the household's new bundle in part (c)?(e) Assume the household's income increases by 5%. Repeat parts (a) to (d)(f) Assume that due to competition prices of food and nonfood products in decline by 5%while the household's income remains the same. Repeat parts (a) and (b) and Compareyour results with part (e).CAMON 11AI16M AI Clear Selfie

a. The budget equation is 20F+150NF= 5000

Assume a household with a monthly income of $5,000. This household allocates its income to the purchasing of food and nonfood products. If the average price of food products is $20 per unit and nonfood items cost $150 per unit (a) Write the household's budget equation. (b) If this household consumes 100 units of food products, how many units of nonfood items can it buy? (c) Assume that the price of nonfood products increases to $160. Write the new budget equation.

Assume a household with a monthly income of $5,000. This household allocates its income to the purchasing of food and nonfood products. If the average price of food products is $20 per unit and nonfood items cost $150 per unit (a) Write the household's budget equation. (b) If this household consumes 100 units of food products, how many units of nonfood items can it buy? (c) Assume that the price of nonfood products increases to $160. Write the new budget equation.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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