Initially, a consumer chooses between water and a composite of other goods. Given her budget and current prices, Manaswini can afford 20 thousand gallons of water a month if she buys nothing else. If she does not purchase water, she can afford 600 units of all other goods. The government begins to ration water, setting a quota of 10 thousand gallons of water a month that a consumer may purchase. How does Manaswini's budget line change? How does her opportunity set change? Suppose the price of other goods per month, Po, is $1.00, the price of water, pw, is $0.03 per gallon, and the consumer has $600 in income per month. Use the line drawing tool to draw the consumer's budget line. Label this line 'Budget line'. Carefully follow the instructions above, and only draw the required objects. What is the marginal rate of transformation (MRT)? Definition The MRT is - U.U3. (Enter a numeric response using a real number rounded to two decimal places.) Draw the original opportunity set in the figure. Use the triangle drawing tool to shade in the original opportunity set. Label this shaded area 'A'. Carefully follow the instructions above, and only draw the required objects. Add a line to the figure showing the quota, and determine the new opportunity set. 1.) Use the line drawing tool to draw a new line indicating the quota. Label this line 'Quota'. 2.) Use both the triangle (Triangle) and rectangle (Rectangle) drawing tools to shade in the new opportunity set. Properly label the shaded areas. Carefully follow the instructions above, and only draw the required objects. Other goods per month 1000- 900- 800- 700- 600- 500- 400- 300- 200- 100- Budget line 04 0 A 10 20 30 40 50 Water, thousands of gallons per month 60 Q
Initially, a consumer chooses between water and a composite of other goods. Given her budget and current prices, Manaswini can afford 20 thousand gallons of water a month if she buys nothing else. If she does not purchase water, she can afford 600 units of all other goods. The government begins to ration water, setting a quota of 10 thousand gallons of water a month that a consumer may purchase. How does Manaswini's budget line change? How does her opportunity set change? Suppose the price of other goods per month, Po, is $1.00, the price of water, pw, is $0.03 per gallon, and the consumer has $600 in income per month. Use the line drawing tool to draw the consumer's budget line. Label this line 'Budget line'. Carefully follow the instructions above, and only draw the required objects. What is the marginal rate of transformation (MRT)? Definition The MRT is - U.U3. (Enter a numeric response using a real number rounded to two decimal places.) Draw the original opportunity set in the figure. Use the triangle drawing tool to shade in the original opportunity set. Label this shaded area 'A'. Carefully follow the instructions above, and only draw the required objects. Add a line to the figure showing the quota, and determine the new opportunity set. 1.) Use the line drawing tool to draw a new line indicating the quota. Label this line 'Quota'. 2.) Use both the triangle (Triangle) and rectangle (Rectangle) drawing tools to shade in the new opportunity set. Properly label the shaded areas. Carefully follow the instructions above, and only draw the required objects. Other goods per month 1000- 900- 800- 700- 600- 500- 400- 300- 200- 100- Budget line 04 0 A 10 20 30 40 50 Water, thousands of gallons per month 60 Q
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please show the last part on a graph that asks: add a line to the figure showing the quota and the new opportunity set.
Transcribed Image Text:Initially, a consumer chooses between water and a composite of other goods. Given her budget and current prices,
Manaswini can afford 20 thousand gallons of water
a month if she buys nothing else. If she does not purchase water, she can afford 600 units of all other goods. The
government begins to ration water, setting a quota of 10 thousand gallons of water a month that a consumer may
purchase. How does Manaswini's budget line change? How does her opportunity set change?
Suppose the price of other goods per month, po, is $1.00, the price of water, pw, is $0.03 per gallon, and the
consumer has $600 in income per month.
Use the line drawing tool to draw the consumer's budget line. Label this line 'Budget line'.
Carefully follow the instructions above, and only draw the required objects.
What is the marginal rate of transformation (MRT)?
Definition
The MRT is -0.03. (Enter a numeric response using a real number rounded to two decimal places. )
Draw the original opportunity set in the figure.
Use the triangle drawing tool to shade in the original opportunity set. Label this shaded area 'A'.
Carefully follow the instructions above, and only draw the required objects.
Add a line to the figure showing the quota, and determine the new opportunity set.
1.) Use the line drawing tool to draw a new line indicating the quota. Label this line 'Quota'.
2.) Use both the triangle (Triangle) and rectangle (Rectangle) drawing tools to shade in the new opportunity set.
Properly label the shaded areas.
Carefully follow the instructions above, and only draw the required objects.
Other goods per month
1000-
900-
800-
700-
600-
500-
400-
300-
200-
100-
0-
Budget line
0
A
20
10
30 40
50
Water, thousands of gallons per month
60
Ⓡ
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