Assume the following is the Budget Equation for a consumer:112 Vodka + 80 Rum = 3991What would be the intercept of the budget line in the Rum axis?Add your answerQuestion 2If the budget line equation is x2 = - 118/93 x₁ + 17305/93What is the income of the consumer?Add your answer10 PointsQuestion 310 PointsHarrison spends all of his income on vacation trips and textbooks. If the price of a trip is $117 and the price of a textbook is $84,then the slope of his budget line (assuming vacation trips are measured on the vertical axis) would beAdd your answer

In economics, a budget equation represents the combination of goods a consumer can afford given…

Answered: Assume the following is the Budget…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 8SQP

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Consider the following table, which listsJames’s marginal utility schedule for steak andhamburger meals: Given a budget of $45, how many steak and hamburgermeals will James buy per month to maximizehis total utility? What is the total utilityrealized?
On the diagram to the right is plotted a single bundle of 2 books and 3 DVDS consumed per month. This bundle is a point on the consumer's budget constraint. 10- 9- If the price of one book is $135.00 and one DVD is $90.00, then the consumer's level of monthly income is $ (round your answer to the neareast dollar). 8- 7- 2- 0- 9 10 Books (per month) 15 tv MacBook Air esc 80 DIL F1 F2 F4 F5 F6 F7 FB ! @ $ & * 1 2 3 4 7 8. 9 Q W E T Y tab ps lock A S F H J X C V M control option command DVDS (per month) N * *
10- 8 Quantity of D A 6 2 0 2 6 8 10 4 Quantity of C Refer to the budget line shown in the diagram. Which of the following combinations of goods is unattainable for this consumer? 1 unit of C and 8 units of D 8 units of C and 4units of D 6 units of C and 2 units of D 2 units of C and 6 units of D
7. Bob receives utility from days spent traveling on vacation domestically (D) and daysspent traveling in a foreign country (F) as given by the utilityU(D; F) = DFThe price of a day spent traveling domestically is 160 pounds and in a foreigncountry 200 pounds. Bobís annual budget for traveling is 8000 pounds. (a) Find Bobís utility maximising choice of days traveling domestically and of daystravelling in a foreign country. Find also his utility level from consuming thatbundle. Suppose that the price of domestic traveling increases to 250 pounds per day.Denoting his budget for traveling x, (suppose by now that it is unknown) findthe demand for D and F under the new prices as a function of x.
EXERCISE 3 If Joe decides to allocate his entire weekly allowance between energy drinks and coffee, he could afford 9 energy drinks and 3 cups of coffee, or 6 cups of coffee and 2 energy drinks. Suppose a cup of coffee costs £2.80. Calculate the price of an energy drink and Joe’s weekly allowance. Write down Joe’s budget equation and draw the corresponding budget line. Mark the two consumption bundles mentioned above. In your graph, clearly label the axes, the budget line, and calculate the coordinates of the points of intersection of the budget line with each axis. Interpret each of those points. Discuss how Joe’s budget set would change if his allowance was reduced by £5.20 a week. Show the relevant changes graphically. How should the price of coffee change so that Joe could still afford to buy 6 cups of coffee and 2 energy drinks? Discuss how Joe’s budget constraint would change if the government subsidised consumption of coffee by £0.50 per cup of coffee.
PLEASE HELP ME ANSWER IT AS FAST AS YOU CAN Hanan consumes two fruits: bananas (B) and apples (A). She has decided that her monthly budget for fruit will be 25 KD. Suppose that one banana costs 0.25 KD (250 Fils), while one apple costs 0.10 KD (100 Fils). a. State Hanan’s budget constraint. b. Draw a graph of Hanan’s budget line. Place the number of units of bananas on the vertical axis and the number of units of apples on the horizontal axis. c. Show graphically how Hanan’s budget line changes under the following scenarios:i. If the price of apples increases to 0.20 KD (200 Fils).ii. If the price of bananas decreases to 0.05 KD (50 Fils). iii. If her income increases to 50 KD.iv. If Hanan decides to cut her monthly budget for fruit in half and notices that bananas and apples are on sale for half price.
8 Do not Copy paste ans
Assume that a consumer has two goods to consume: medical care services (M) and all other goods (X). She has monthly income of $4000. a. Plot how the budget constraint should change when this consumer’s income increased to $8000. Remember to label the origin, axis, and intercepts on your graph.
1. 2. Suppose Frank enjoys traveling and his utility is a function of the number of airplane trips he takes and the number of bus rides he takes. His utility function is given by U(b,p) = 3b0-4p0.8. A trip on a plane costs $400, a trip on the bus costs $50 and Frank has $3,000 to spend on travel. a. Draw Frank's budget line on a graph with bus trips on the vertical axis. b. Calculate AND INTERPRET the slope of Frank's budget line. c. Draw a representative indifference curve on your graph and provide a function that describes the slope of this indifference curve (i.e., find Frank's marginal rate of substitution). What is the INTERPRETATION of the marginal rate of substitution? d. What two conditions must be met in order for Frank to maximize his utility? e. What are the utility maximizing quantities of plane trips and bus trips for Frank? Given income of $1000, Px = 25 and Py = 40, find (1) a function for the MRS and (2) the utility maximizing consumption bundle for each of the…
Please no written by hand and no emage Consider a consumer that consumes 2 teaspoons of sugar with each cup of coffee. For each cup of coffee with sugar the consumer gains 10 utils.a) Write down the utility function that gives the total utility if the consumer consumes S teaspoons of sugar and C cups of coffee. The consumer has assigned £7 per week to be spent on drinking coffee with sugar. The current price of coffee is £0.50 per cup and each spoon of sugar costs £0.10. b) Calculate the optimal weekly consumption bundle for this consumer.c) Does the consumer view C and S as complements or substitutes?
The graph shows two budget lines and six consumption points (A, B, C, D, E, and F) for Pepsi and Dr Pepper. Note that budget line 1 is before the increase in Fred's income, whereas budget line 2 is after the increase in Fred's income. Assume that the consumer, Fred, attempts to maximize his utility and exhausts his budget on the two goods. If Fred's income increases, the movement from point A to point E is consistent with Pepsi being a normal good and Dr Pepper being an inferior good. If Fred's income increases, the movement from point A to point B is consistent with Dr Pepper being a normal good and Pepsi being an inferior good.
Currently, Paula is maximizing utility by purchasing five TV dinners (T) and four LeanCuisine Meals (L) each week. Suppose both T and L cost $5 each.a. Graph Paula’s initial utility-maximizing choice.b. Suppose the price of T falls by $1 and the price of L rises by $1.25. Can Paula stillafford to buy her initial consumption choices? What do you know about her new budgetconstraint?c. Make a new graph to show why Paula will choose to consume more T and less Lgiven her new budget constraint to maximize utility. Is her utility increased, decreased,or unchanged given the price change? [Hint: try to make the graph as big as possible tosee how the utility is tangent/intersects with the lines more easily] d. In part (b), suppose another scenario where the price of T rises by $1 and the priceof L falls by $1.25. Is Paula’s utility increased, decreased, or unchanged given the pricechange?

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