Birgitta spends 150 shillings per month on coffee and buns at the cafeteria. A cup of coffee costs 15 shillings and a bun costs 10 shillings.Write the equation for Birgitta’s cafeteria budget constraint and draw it in a diagram. Assume that Birgitta never drinks coffee without eating one bun, and never eats buns without drinking coffee. How much of each will she consume? Draw some of her indifference curves.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Birgitta spends 150 shillings per month on coffee and buns at the cafeteria. A cup of coffee costs 15 shillings and a bun costs 10 shillings.

Write the equation for Birgitta’s cafeteria budget constraint and draw it in a diagram.
Assume that Birgitta never drinks coffee without eating one bun, and never eats buns without drinking coffee. How much of each will she consume? Draw some of her indifference curves.

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