Carlos is buying salad and pizza for a company lunch. Suppose that a bowl of salad costs $4.00, and a slice of pizza costs $2.00.Let E be the amount in dollars that Carlos spends on salad and pizza. If Carlos buys S bowls of salad and P slices of pizza, then the total amount ofmoney he spends (E) can be represented by the equationNow rearrange the equation you wrote above so that P is written in terms of E and S. The quantity of pizza he buys can be represented by theequationSuppose Carlos has $40.00 to spend on salad and pizza; that is, E = $40.00.Complete the following table with the values of S or P that make the equation true.Hint: To complete the first row, determine the number of pizza slices Carlos can purchase with $40.00, when the number of salad bowls he purchasesis 0.Budget(Dollars)40.0040.0040.00Salad Pizza(Bowls) (Slices)050Use the black line (plus symbols) to plot the line illustrating the combinations of salad and pizza that Carlos can purchase with a budget of $40.00. PIZZA (Slices)24222018141210864200 2 4 68 10 12 14 16 18 20 22 24 26 28 30SALAD (Bowls)Initial BudgetNew BudgetNow suppose Carlos's income increases by 50%: That is, he has 50% more money to spend than he did before.On the previous graph, use the blue line (circle symbols) to plot Carlos's new budget constraint.Which of the following statements best summarizes the pattern of causality captured by the graph above? Check all that apply.The relationship between S and P is not a causal relationship.A change in E causes a shift of the budget constraint.O A change in P causes a change in S.A change in S causes a change in P.

There is a person named Carlos, buying salald and pizza. A bowl of salad cost $4, and a slice of…

Let E be the amount in dollars that Carlos spends on salad and pizza. If Carlos buys S bowls of salad and P slices of pizza, then the total amount of money he spends (E) can be represented by the equation Now rearrange the equation you wrote above so that P is written in terms of E and S. The quantity of pizza he buys can be represented by the equation

Let E be the amount in dollars that Carlos spends on salad and pizza. If Carlos buys S bowls of salad and P slices of pizza, then the total amount of money he spends (E) can be represented by the equation Now rearrange the equation you wrote above so that P is written in terms of E and S. The quantity of pizza he buys can be represented by the equation

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.2P

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Suppose that the least amount of goods and services that Jim will consume in a year is $40,000. Jim tends to save $0.30 of every dollar of disposable income that he makes. Use the given line to graph Jim's consumption function for disposable income levels between $0 and $200,000. Move each endpoint to the appropriate spot on the graph.
Use the graph to answer the following: (a) At the optimal consumption point, approximately how many armadillos will be consumed? (b) Approximately how many apricots will be consumed? (c) If this consumer spent all of his income on armadillos, how many armadillos could he buy? (d) If his income decreased, what would it look like? Draw the appropriate shift on the graph.
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