Graduate students at University of Massachusetts consume only two goods: rental apartment space (good x) and sandwiches (good y). 2020: I = $3,000 Px = $4Py = $6 %3D 2021: I = $3,300 Px = $5Py = $6 Assume, in each year, all graduate students have the same income and face the same prices for apartments and sandwiches. However, graduate students have different preferences for apartments and sandwiches, but each student's preferences are consistent from year to year. Assume also that each student chooses his most preferred bundle given his budget set in each year. Denote the bundle in 2020 by (Xo, yo) and this year's bundle by (x1, yı). a. What are the equations for their budget constraints in 2020 and 2021? b. What combination (bundle) of apartments and sandwiches is on graduate students' budget constraints in 2020 and 2021? С. On a carefully labeled graph with square feet on the horizontal axis, draw the budget constraints.
Graduate students at University of Massachusetts consume only two goods: rental apartment space (good x) and sandwiches (good y). 2020: I = $3,000 Px = $4Py = $6 %3D 2021: I = $3,300 Px = $5Py = $6 Assume, in each year, all graduate students have the same income and face the same prices for apartments and sandwiches. However, graduate students have different preferences for apartments and sandwiches, but each student's preferences are consistent from year to year. Assume also that each student chooses his most preferred bundle given his budget set in each year. Denote the bundle in 2020 by (Xo, yo) and this year's bundle by (x1, yı). a. What are the equations for their budget constraints in 2020 and 2021? b. What combination (bundle) of apartments and sandwiches is on graduate students' budget constraints in 2020 and 2021? С. On a carefully labeled graph with square feet on the horizontal axis, draw the budget constraints.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Graduate students at University of Massachusetts consume only two goods: rental
apartment space (good x) and sandwiches (good y).
2020:
I = $3,000
Px = $4Py = $6
2021:
I = $3,300
Px = $5Py = $6
Assume, in each year, all graduate students have the same income and face the same prices for
apartments and sandwiches.
However, graduate students have different preferences for
apartments and sandwiches, but each student's preferences are consistent from year to year.
Assume also that each student chooses his most preferred bundle given his budget set in each
year.
Denote the bundle in 2020 by (xo, yo) and this year's bundle by (x1, y1).
a.
What are the equations for their budget constraints in 2020 and 2021?
b.
What combination (bundle) of apartments and sandwiches is on graduate
students' budget constraints in 2020 and 2021?
On a carefully labeled graph with square feet on the horizontal axis, draw the
с.
budget constraints.
d.
Which students are better off this year, compared to last year? Which students
are worse off this year, relative to last year?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9d9e168a-9464-4c08-8d6d-0c3b079a04ec%2F16748ea5-428e-4fe8-af56-7aa9bd90a767%2F1udomwt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Graduate students at University of Massachusetts consume only two goods: rental
apartment space (good x) and sandwiches (good y).
2020:
I = $3,000
Px = $4Py = $6
2021:
I = $3,300
Px = $5Py = $6
Assume, in each year, all graduate students have the same income and face the same prices for
apartments and sandwiches.
However, graduate students have different preferences for
apartments and sandwiches, but each student's preferences are consistent from year to year.
Assume also that each student chooses his most preferred bundle given his budget set in each
year.
Denote the bundle in 2020 by (xo, yo) and this year's bundle by (x1, y1).
a.
What are the equations for their budget constraints in 2020 and 2021?
b.
What combination (bundle) of apartments and sandwiches is on graduate
students' budget constraints in 2020 and 2021?
On a carefully labeled graph with square feet on the horizontal axis, draw the
с.
budget constraints.
d.
Which students are better off this year, compared to last year? Which students
are worse off this year, relative to last year?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![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)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![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)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education