Draw a budget constraint for two goods and set of indifference curves over the possible combinations of the goods. Label the optimal consumption bundle for your drawing.
Q: Centa spends $56 a month at allthemovies.com on film-noir (FN) and sci‑fi (SF) movies, which…
A: A budget constraint refers to the different combinations of two goods that a consumer can afford…
Q: A consumer has set a budget of $400 for the consumption of good X and Y. The price of Good X is…
A: Utility function : U (X, Y ) = x y Price of x : Px Price of y : 5 Budget Set = 400 Therefore ,…
Q: Suppose that a consumer has $200 to spend on two goods: beer and pretzels. The price of beer is…
A: Given Price of beer (Pb)=$6 Price of pretzels (Pp)=$3 Pretzels are on x-axis and beer is on y axis.…
Q: Why does the optimal consumption bundle occur where the budget line is tangent to the indifference…
A: Answer: Introduction: A consumer maximizes his/her consumption where the slope of the budget line is…
Q: A person has $25 to spend on apples, bananas, and cherries. Their respective prices are $2, $3, and…
A: The budget constraint for a person spending $25 on apples, bananas, and cherries, with prices of $2,…
Q: Assume that a combination of two goods reflects a point of tangency between the budget line and an…
A: In consumer theory, the combination of goods and services that a consumer can acquire for his or her…
Q: Create a diagram with axes representing the quantities of XA and XB. Plot the original and new…
A: Substitution effect measures the change in the quantity of the commodity when the price of the…
Q: Lucas has $40 per week that he can spend on lemon soda (X) and chips (Y). The price of the lemon…
A: The budget refers to the total income of a consumer which can be used to buy a given level of goods,…
Q: An individual has a utility function, U(x, y) = x ∙ y, with a budget constraint, 120 = 2x + y. (a)…
A: Consumer maximizes utility subject to the budget constraint. The consumer consumes at the point…
Q: Kevin likes going to the ballpark to watch baseball, and he also is fond of going to the theater to…
A: Budget constraint is the equation that shows how the income of the consumer puts a constraint on the…
Q: Kari requests two goods: X and Y. The utility function is given by: U(XY)=X-Y. Prices of X and Y is…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…
Q: Jessie has a budget of $50 and is attempting to draw her budget constraint for purchasing cookies…
A: Price of goods can be calculated by using the following formula.
Q: suppose you have a fixed income of $3000 per month and you want to allocate your budget between two…
A: Monthly income (M)= $3000Price of good x (Px) =$10 per unitPrice of good y (Py)=$20 per unit.Budget…
Q: Using a budget line, why does a decrease in the price of a good allow one to potentially consume…
A: A budget line shows various combinations of two goods a consumer can purchase by spending all income…
Q: The budget set, or budget constraint, in the graph shows the possible combinations of brownies and…
A: Budget line shows graphically the possible combinations of two goods which a consumer can purchase…
Q: 1) A) Suppose that y is an inferior good and the price of y falls. Draw a budget constraint and…
A: Inferior goods are the goods for which income and demand are inversely related. When the income…
Q: Write out the standard form of a budget constraint (meaning only with variables, no numbers). Then,…
A: The budget constraints represent all possible combinations of consumer goods that a consumer can buy…
Q: Arthur spends his income on bread and chocolate. Chocolate is a good from which Arthur gets a…
A: Indifference curve: Indifference curve shows different combinations of 2 goods such that consumer’s…
Q: Suppose there are two goods, x and y. If one good has a negative price, and the other good has a…
A: The objective of the question is to determine whether the slope of the budget constraint will be…
Q: For two goods that I consume and I like both of them, say hamburger and Ice Latte, if hamburger is…
A: Introduction: The budget line depicts all potential combinations of two commodities that a customer…
Q: Present a budget line and a budget set for the consumer of two good X and Y, where the consumer has…
A: Utility function and budget constraint: The utility function refers to all those commodity bundles…
Q: A consumer has income of $3,000. Wine costs $3 per glass, and cheese costs $6 per pound. Make a…
A: Budget constraint is the boundary of the opportunity set-all plausible combinations of goods a…
Q: Question 3 (Budget Constraint). Vince consumes gas (x1) and food (x2). Suppose the price of gas is…
A: Dear student, you have asked multiple sub-part questions in a single post. In such a case, I will be…
Q: For Daniel, Pepsi and pizza are complementary products. He consumes a Pepsi with two slices of…
A: Complementary goods are products that increase in price when the demand for relative merchandise…
Q: a. What is your marginal rate of substitution of $1 bills for $5 bills? b. Produce an indifference…
A: (a) b) Note that this MRS of $1 bills to $5 bills is constant, i.e, the slope of the required…
Q: Graph the effects of the following on separate graphs. Make sure to highlight the new budget…
A: Initial Budget Constraint: This is based on the initial prices of X and Y and the consumer's…
Q: The graph represents a budget constraint showing the purchases of Good X and Good Y. If the price of…
A: Budget constraint refers to limitations that individual or firm faces when trying to allocate their…
Q: Suppose you have $100 to spend on Skittles and M&Ms. The price of Skittles is $5.00 and the price of…
A: Every combination of products and services that a customer may purchase at the current market price…
Q: Sam likes Pepsi (P) twice as much as he likes Coke (C). Assume the price of Pepsi is $3 and the…
A: Budget constraint shows different combinations of two goods that a consumer can afford with the…
Q: A consumer’s budget set for two goods (X and Y) is 500 ≥ 4X + 5Y. a. The budget set is illustrated…
A: The budget constraint is given by the inequality: 500≥4X+5Y.To find the values of A (the intercept…
Q: Charlie has a utility function U(xA, xB) = xAxB, the price of apples is $1, and the price of bananas…
A: Utility means satisfaction.Marginal utility is the utility derived from the consumption of an…
Q: Draw YOUR indifference curve for the consumption of two goods (you pick the goods – be creative!)…
A: A consumer is a rational person who wants to gain the maximum satisfaction level from paying the…
Q: Lucia lives in Denver and enjoys drinking lattes and eating scones. The price of a latte is held…
A: Budget constraint shows all combinations of two goods that can be produced with the given level of…
Q: Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M,…
A: In microeconomics, the function of U {"utility"} is described as a crucial term or concept in which…
Q: Sally consumes two goods, X and Y. Her utility function is given by the expression U = 2XY3. The…
A: Given Px =20, Py=10 and I = 500
Q: What is a budget constraint? A consumer has an income of $3000. Soda costs $3 per liter and cheese…
A: Micro economics is a branch of economics which studies economics at individual level. It means that…
Q: A consumer is choosing between magazines and books. Several indifference curves are shown on the…
A: The Income of the consumer $500The Price of books = $10
Q: Consider a consumer whose utility function is u(x, y) = √xy (MRS(x, y) = - a. Assume the consumer…
A: Budget constraint represents all the possible combinations of the goods or services that a consumer…
Q: ketch a person’s indifference map and budget line for two goods, X on the horizontal axis and Y on…
A: Initially, the optimal bundle is (X*,Y*).The optimal consumption point is E1. (a) A rise in the…
Q: True or false. A budget constraint, budget line or budget set is a graphical way to illustrate all…
A: It's vital to remember that the slope of the budget line equals the cost ratio of two commodities.…
Draw a budget constraint for two goods and set of indifference
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 2 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Jessie is attempting to draw her budget constraint for purchasing cookies and strawberries. At a maximum, she could consume 500 strawberries; she labels this point on the vertical axis of her budget constraint. At a maximum, she could consume 200 cookies; she labels this point on her graph. If the price of a cookie is $0.50 and her budget is $100, what is the price of a strawberry?A consumer has an income of $400 and is deciding between two products: X and Y. Assume that the X product is the horizontal axis product. The price of X is $10 and the price of Y is $2. Assume the consumer currently wants to consume 50 units of product Y to maximize his utility. a) Write out the equation to this consumers budget line. What is the slope to this budget constraint? b) How much of X and Y will the consumer consume to maximize his utility subject to his budget constraint. C) Now assume the price of X changes to $5 and price of Y and Income stays the same. At the new price, the consumer wants to buy 60 units of product X to maximize her utility given her budget. How much X and Y will the consumer consume to maximize utility. g in the before and after the change of the budget constraint and indifference graph on the same graph space. Show all necessary points. Label clearly. ead oubstitutiofs. Draw d) Write out the expression of the utiiity maximizing ruie here.?Suppose you had a budget of $20.00 and the prices of a burger and a slice of pizza are $5.00 and $2.00 respectively. What would be your optimal consumption bundle?
- Describe and graph your own example of a budget constraint using two goods (don’t forget to label your axes). In your example, make sure to state what the budget is, the price of the two goods, what the slope of the budget constraint equals (make sure to include the correct sign), and interpret what the slope represents.Question 3: Samantha has $3,000 to spend on two goods: sandwiches and beer. The price of a sandwich is $6 and price of a beer is $5. a) Draw Samantha's budget line. Put beer on the horizontal axis. b) If Samantha's optimal consumption bundle contains 400 sandwiches, how many beer does her optimal consumption bundle contain? Show her optimal consumption in the graph above. c) Draw Samantha's indifference curve crossing her optimal consumption bundle.Lorenzo enjoys going to the theater to see plays, and he also enjoys going to rock concerts. The following diagram shows two of Lorenzo's indifference curves for going to plays and concerts. With Lorenzo's initial budget constraint (BC1), he chose to go to five concerts and three plays per month (point X). Then his budget constraint shifted to BC2, and he chose to go to four concerts and six plays per month (point Y). PLAYS 10 0 4 5 CONCERTS BC 8 Show Transcribed Text BC 10 C Of the following choices, which could have shifted Lorenzo's budget constraint from BC₁ to BC₂? Check all that apply. The price of theater tickets increased while his income and the price of concert tickets stayed the same. His income decreased while the prices of theater and concert tickets stayed the same. His income increased while the prices of theater and concert tickets stayed the same. The prices of both theater and concert tickets decreased while his income stayed the same. Based on Lorenzo's consumption…
- Yam has the following utility function for Apples (X1) and Ice Cream (X2), U(X1,X2) = Min{3X1,X2}. Yam likes to get more of both Apples and Ice Cream. Suppose Yam has an income of M = $160 budgeted to be spend on these two goods and the prices of Apples and Ice Cream are p1 =$2, p2 =$1. Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose a quantity tax of $1 is imposed on Ice Cream. Yam's after tax optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose instead of the quantity tax, the government choose to impose a lump-sum tax of $20. After the imposition of the lump-sum tax, Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) If government would have to impose one of these 2 kinds of taxes, which of these types of tax would be better…Utility maximization with a budget constraint. A hypothetical consumer spends all tgheir income on ramen noodles (N) and wild rice (W). N is the quantity of noodles; W is the quantity of wild rice. Their income is $1,600 per month. the price of noodles is $2 per package and the price of wild rice is $20 per pound. The utility function is U=sqrt(N*W). the MRS = -N/W. The budget constraint is: 1,600 = 2*N + 20*W Graph Qty of noodles (N) on vertical axis and Qty of wild rice (W) on horizontal axis. SOLVE: a. Graph the budget constraint. label all points. What is the slope of the budget constraint? b. Find the optimal quantities of noodles(# of packages) and the wild rice (# of pounds) given the budget constraint. graph these optimal quantities. draw your indifference curve on the same graph. c. Show on your graph what happens when the price of wild rice increases to $40 per pound. Find your new optimal quantities of noodles and wild rice. label all points on graph. label the…Suppose your only source of income is work and that you are paid $20 per hour. This determines a budget constraint. You can buy free time at the expense of your income by working less. Likewise, you can get more income at the expense of your free time by working more. Suppose that you can choose how many hours you work. How do you decide exactly on which point of your budget constraint you will choose? Explain this by referring to your indifference curves.
- Suppose you have a $20 gift card and want to buy Blue and Red yarn. The utility function from yards of blue (B) and red (R) yarn can be expressed as follows: U(B,R) = 3B+R Red yarn costs $4 per yard. blue yarn costs $4 per yard. A) Graph the budget constraint and the indifference curves that can be reached. How many yards of each type of yarn will he purchase at these prices with his gift card?A consumer has $100 to spend on craft beer and Schweinefleischaft (pork shanks). Suppose craft beercosts $10 per 4-pack if the customer purchases up to five 4-packs. After that, it is $5 per 4-pack. SupposeSchweinefleischaft is $5 per order of pork shanks.(a) Draw the budget constraint for this consumer, with craft beer on the horizontal axis and Schweine-fleischaft on the vertical axis.(b) Will the consumer ever purchase exactly five 4-packs of craft beer? Explain why, using both thegraph in part (a) and words.I MUST DRAW THE BUDGET CONSTRAINT AND INDIFFERENCE CURVE
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)