Consider a local department store which only sells jeans (J) and sweaters (S). Jeans cost $30and sweaters cost $15. For each of the examples below, graph the budget constraint our consumer faces, putting J on the horizontal axis and S on the vertical one. Be sure to label our consumer’s initial bundle(what he comes into the store with). a) The consumer comes into the store with 20 sweaters to exchange (and a gift receipt!). b) The consumer comes into the store with 20 sweaters to exchange (and a gift receipt!). There is a 50% restocking fee. c)The consumer comes into the store with 10 jeans and 10 sweaters to exchange (and a gift receipt!). There is a 50% restocking fee on jeans only. Note:-
Consider a local department store which only sells jeans (J) and sweaters (S). Jeans cost $30and sweaters cost $15. For each of the examples below, graph the budget constraint our consumer faces, putting J on the horizontal axis and S on the vertical one. Be sure to label our consumer’s initial bundle(what he comes into the store with).
a) The consumer comes into the store with 20 sweaters to exchange (and a gift receipt!).
b) The consumer comes into the store with 20 sweaters to exchange (and a gift receipt!). There is a 50% restocking fee.
c)The consumer comes into the store with 10 jeans and 10 sweaters to exchange (and a gift receipt!). There is a 50% restocking fee on jeans only.
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