Assume that Mania has $1,200 per month to spend between dinners at a Japanese restaurant and evenings at Cru, a local bar. Assume that going to Cru costs $25 and eating at the restaurant costs $14. Draw Mania’s budget constraint with restaurants on the horizontal axis. Suppose Mania comes into some money and can now spend an extra $200 per month. Draw her new budget constraint. Suppose the price of restaurants decrease to $12, while her income and the price of Cru is unchanged. Illustrate what happens to her budget line.

Assume that Mania has $1,200 per month to spend between dinners at a Japanese restaurant and evenings at Cru, a local bar. Assume that going to Cru costs $25 and eating at the restaurant costs $14. Draw Mania’s budget constraint with restaurants on the horizontal axis. Suppose Mania comes into some money and can now spend an extra $200 per month. Draw her new budget constraint. Suppose the price of restaurants decrease to $12, while her income and the price of Cru is unchanged. Illustrate what happens to her budget line.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 9SQ

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budget ?
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