Brenda wants to buy a new car and has a budget of $24,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 0 to 12, with 12 representing either the most styling or the best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $2,000. She also observes that as the gas-mileage index rises by one unit, the price of the car increases by $4,000. (a) Illustrate (for yourself) the various combinations of gas mileage (G) and style (S) that Brenda could select with her $24,000 budget. Place gas mileage on the horizontal axis. • Her budget line is given by 4,000*G +| [ Select ] *S= [ Select ] • The X-intercept of her budget line is equal to [ Select ] • The Y-intercept of her budget line is equal to [ Select ]

Brenda wants to buy a new car and has a budget of $24,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 0 to 12, with 12 representing either the most styling or the best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $2,000. She also observes that as the gas-mileage index rises by one unit, the price of the car increases by $4,000. (a) Illustrate (for yourself) the various combinations of gas mileage (G) and style (S) that Brenda could select with her $24,000 budget. Place gas mileage on the horizontal axis. • Her budget line is given by 4,000G +| [ Select ] S= [ Select ] • The X-intercept of her budget line is equal to [ Select ] • The Y-intercept of her budget line is equal to [ Select ]

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...

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