Consider food stamps where the government gives a person $200 worth of food stamps that provide a 50% discount on food bought. With $200 of these food stamps, the person can used the food stamps to buy $200 of food for $100 cash. After his food stamps are exhausted, the person can continue to buy food but must pay full price in cash. All Other Goods The blue budget line shows before getting food stamps. The green budget line is after getting food stamps. The red budget line is after getting food stamps. Food Moving from D to B, the person is using food stamps to buy food. From C to A, the person is using food stamps to buy food. At point A, all the food stamps are used. At point A, the person is consuming 100 units of food and spending the rest of his money on other goods.

Consider food stamps where the government gives a person $200 worth of food stamps that provide a 50% discount on food bought. With $200 of these food stamps, the person can used the food stamps to buy $200 of food for $100 cash. After his food stamps are exhausted, the person can continue to buy food but must pay full price in cash. All Other Goods The blue budget line shows before getting food stamps. The green budget line is after getting food stamps. The red budget line is after getting food stamps. Food Moving from D to B, the person is using food stamps to buy food. From C to A, the person is using food stamps to buy food. At point A, all the food stamps are used. At point A, the person is consuming 100 units of food and spending the rest of his money on other goods.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Wendy drinks 10 sugary drinks and 4 smoothies a week. Smoothies are $5 each and sugary drinks were $2 each. This week, things are different: the government has slapped a tax on sugary drinks and their price has doubled to $4. But it's not all bad news for Wendy. The government has also revised the income tax, so Wendy's drinks budget has increased. She can now just afford to buy her usual 10 sugary drinks and 4 smoothies a week.
3- Sam, Ram, and Cam all like only Apples and Oranges. Sam's utility is of the form U = √√A.O; Ram's utility is of the form U = Min(A,40) or A=40; and Cam's utility is of the form U = 30 + A. The each receive an allowance of 96 dollars weekly. The price of Apples is $1 and the price of Oranges is $2. A. Write and Graph their budget constraint. B. What is the MRS of each Utility function? C. Find the equilibrium amounts of Apples and Oranges that each of them is willing to buy weekly. D. What is the level of Utility they achieve? (For Ram each bundle gives him 3 Utils)
Hello, I am not understanding this practice problem. There isnt no figure missing.
The price of DVDs (D) is $30.00 and the price of CDs (C) is $30.00. Katrina has a budget of $150.00 to spend on the two goods. Suppose that she has already bought 1 DVD and 1 CD. In addition, there are 3 more DVDs and 3 more CDs that she would really like to buy. 1.) Using the line drawing tool, given the above prices and income, draw her budget line in the figure. Label this line 'L' 2.) Using the point drawing tool, and considering what Katrina has already purchased and what she still wants to purchase, identify the three different bundles of CDs and DVDs that she could choose. Label these points 'bundle 1', 'bundle 2', and 'bundle 3'. (Assume that she cannot purchase fractional units) Carefully follow the instructions above, and only draw the required objects. DVDs 8- 6- 4- 2- 0- 0 6 8 10 CDs 12 Q
The price of DVDs (D) is $20.00 and the price of CDs (C) is $20.00. Katrina has a budget of $100.00 to spend on the two goods. Suppose that she has already bought 1 DVD and 1 CD. In addition, there are 3 more DVDs and 3 more CDs that she would really like to buy. 1.) Using the line drawing tool, given the above prices and income, draw her budget line in the figure. Label this line 'L'. 2.) Using the point drawing tool, and considering what Katrina has already purchased and what she still wants to purchase, identify the three different bundles of CDs and DVDs that she could choose. Label these points 'bundle 1', 'bundle 2', and 'bundle 3'. (Assume that she cannot purchase fractional units)
Minimize the following. Show all work and graph.
Jody has $360 to spend on her summer vacation. She decided to use the moneyon trips to the zoo and on tickets to the movies. Her original budget constraintis shown below. Let X represent movie tickets and Y represent trips to the zoo.i. What is the equation of the original budget constraint? ii. What is the price of a movie ticket? a trip to the zoo? iii. Assume a price change occurs and Jody now face the new budgetconstraint. What is the equation of the new budget constraint? iv. With the new budget constraint, what is the price of an amusement parkticket? a baseball ticket
2. David gets $3 per week as an allowance to spend any way he pleases. Since he likes only peanut butter and jelly sandwiches, he spends the entire amount on peanut butter (at $0.05 per ounce) and jelly (at $0.1 per ounce). Bread is provided free of charge by a concerned neighbor. David is a picky eater and makes his sandwiches with exactly 1 ounce of jelly and 2 ounces of peanut butter. He is set in his ways and will never change these proportions. a) How much peanut and jelly will David buy with his $3 allowance per week? b) Suppose the price of jelly increases to $0.15 per ounce. How much of each commodity would be bought? c) By how much should David's allowance be increased to compensate for the rise in the price of jelly in part b? d) Graph your results of part a through part c.
Jody has $360 to spend on her summer vacation. She decided to use the moneyon trips to the zoo and on tickets to the movies. Her original budget constraintis shown below. Let X represent movie tickets and Y represent trips to the zoo.i. What is the equation of the original budget constraint? ii. What is the price of a movie ticket? a trip to the zoo? iii. Assume a price change occurs and Jody now face the new budgetconstraint. What is the equation of the new budget constraint? iv. With the new budget constraint, what is the price of an amusement parkticket? a baseball ticket?
In the below figure, a consumer is initially in equilibrium at point C. The consumer's income is $750, and the budget line through point C is given by $750 = $150X + $375Y. When the consumer is given a $ 300 gift certificate that is good only at store X, she moves to a new equilibrium at point D. a. Determine the prices of goods X and Y. Price of X: $ 150 Price of Y: $ 375 b. How many units of product Y could be purchased at point A? rmal or an inferior good? Product Y c Product X F
Madison has set aside $24 for her snack budget this month. Her favorite snacks are ice cream and chips. The price of a pint of ice cream is $4 and the price of a bag of chips is $3. She currently consumes three pints of ice cream and four bags of chips each month. If the price of a pint of ice cream drops to $3, the income effect predicts that Madison will consume: more ice cream and more chips. equal amounts of ice cream and chips. more ice cream and fewer chips. less ice cream and more chips.
Don