Consider Justin who makes $1,400 per week and just won a ‘set for life’ lottery ticket which involves a fortnightly payment of $10,000 for 20 years. Currently he works 35 hours per week. Now do the following: • Illustrate the effect of the lottery win on Justins budget constraint using a fully labelled diagram where i) the horizontal axis represents the hours of free time per week, and ii) the vertical axis represents Justins weekly consumption. • Illustrate on the same diagram Justins optimal decisions before and after the lottery win along with his indifference curves. • Based on your diagram, discuss whether Justin will quit his job.

Q: If the price of biscotti is $1.50 and the price of a cappuccino is $3.00, what is the slope of the…

A: Budget constraint shows the relationship between the two goods, their prices and the income of the…

Q: Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one…

A: Budget Constraint:A budget constraint refers to the limitation on spending that an individual,…

Q: Consider Alexei who makes $1,400 per week and just won a ‘set for life’ lottery ticket which…

A: Budget Constraint shows that the value of all the goods that a consumer consumes should be less than…

Q: UNITS MU OF SUGAR MU OF MILK 100 60 80 50 3. 60 40 4 40 30 20 20 10 INCOME=Rs 100 Price of sugar-Rs…

A: Utils is the measurement unit to measure the satisfaction a consumer gets by consuming goods, so…

Q: Based on research into marginal rates of substitution, which of the following is true regarding…

A: Answer-

Q: 3) Diminishing marginal rate of substitution can be seen when indifference curves A) become flatter…

A: Typically, marginal substitution is lessening, meaning a shopper picks the substitute instead of…

Q: Prim has a fixed amount of energy to use each day. She currently exhausts this entire energy by…

A: Given that Prim exhausts her entire energy picking two combinations of honeysuckles and pond lilies,…

Q: wers, you should, where appropriate, be referring to concepts such as the ma anical substitution,…

A: Indifference curve shows the different combinations of two goods that provide the same level of…

Q: Danièle has 40 hours a week she can use for work or leisure. She earns 16 euros an hour and has no…

A: The utility function calculates a consumer's satisfaction or welfare as a function of their…

Q: Sue gets a total of 20 utils per week from her consumption of donuts and 40 utils per week from her…

A: Total utility is the total satisfaction received from the consumption of a good or service. Marginal…

Q: which is the most preferred level of individual’s choice for public expenditure relating it with…

A: Utility means the total satisfaction a consumer or individual gets by consuming a certain amount of…

Q: Cathy has $240 to spend on cherry and/or coconuts. Suppose you have drawn her budget line for cherry…

A: Budget line shows different combinations of two goods that can be bought with the given level of…

Q: Suppose that a person has 2000 hours to allocate each year between leisure and work. a. Derive the…

A: Budget line:It is a graphical representation of the various combinations of two items. That is the…

Q: J 4 a. Define an Indifference Curve (IC)

A: In today's microeconomics, indifference curves are utilised to show consumer preferences and…

Q: True or False: The opportunity cost of an additional bag of bird seed, in terms of other consumption…

A: A budget constraint represents all the combinations of goods and services that a consumer may…

Q: Miles is an engineering student who uses all his income to buy instant coffee and food. Miles's…

A:

Q: 2. [For this question, the unit used is in thousands of Rupiah]. Rihana's preferences for…

A: reservation fee is the MRS at the endowment. why so ? because MRS shows us that the rate at which…

Q: a) Chika has calculated the marginal utility that she derives from her paid employment and from…

A: Marginal utility represents the additional satisfaction obtained from consuming an additional unit…

Q: (b) Now use your calculations in (a) above to approximate the change in the level of utility of the…

A: The marginal rate of substitution is the rate of substitution at which consumers change the…

Q: Scenario 16.1: Irrespective of the amount of cheese doodles and pretzels that Sam consumes, his…

A: In economics, pareto efficiency or optimality occurs when it is not possible to make any individual…

Q: A consumer earns a wage of 20 dollars per hour and has an unearned income of $100 per day. What…

A: wage rate = $20 per hour unearned income = 100

Q: Please explain -why budget constraint is W1=(Ct1+Cn1)*pn1.and how you derive (step by step) inter…

A:

Q: Refer to the information provided in Figure 6.2 below to answer the questions that follow. Number of…

A: "Since you have asked a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Juanita lives in New York City and enjoys drinking lattes and eating scones. The price of a latte is…

A: A budget line, also known as a budget constraint, is a graphical representation or mathematical…

Q: If a household's money income is doubled:

A: If a household money income is doubled .

Q: For this question, assume that indifference curves are strictly convex, consumption and leisure are…

A: Worker has to decide between the work and leisure. A rise in wage affects such selection of worker.…

Q: Consider a consumer who must allocate their available income between the consumption of two goods,…

A: Marginal utility refers to the additional utility derived from the consumption of one more unit of…

Q: consumer has $300 to spend on goods X and Y. The market prices of these two goods re P, = $15 and P,…

A: Market rate of substitution refers to the rate at which two goods can be exchanged in a market place…

Q: Refer to the figure at right. Which of the following statements is consistent with the relationship…

A: Price you pay per unit of input is the average expenditure per unit.  The extra cost of hiring one…

Q: 3. Draw and describe analytically the set of feasible consumption choices. What is the marginal rate…

A: Answer: Feasible consumption choices: the set of feasible consumption choices are all the choices…

Q: John is trying to decide how to divide his time between his job as a stocker in the local grocery…

A: The opportunity cost describes the potential benefit forgone for choosing one alternative over…

Q: The consumer's utility function for Consumption (C) and Leisure (L) is given as U(C,L) = √CL His…

A: Consumer utility function: U(C,L)=CL          .......(1) Hourly wage w =$10 Non-labor income (V)=…

Q: Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one…

A: Budget Set:Budget set refers to the collection or set of all possible consumption bundles that an…

Q: der the relatiönship y = f(x). In this relationship: O a. y is called the independent variable and x…

A: y=f(x) implies that y is a function of x. The function can be increasing or decreasing. If y is an…

Q: is income per day). Find and graph the new budget constraint (income per day = M) for w= $8/hr.…

A: Due to the fact that a larger income enables the consumer to buy more of both products, the new…

Q: (b) Show, using algebra, that Ronald’s two budget lines intersect at the bundle (x, y) = (5.5, 8.7).

A: Budget Line:The budget line serves as a visual representation of the budget constraint, showing the…