)ncob buys only milk and cookies.a. In yeor 1, Jocob earns $100, milk costs $2 perqua rt, and cooki es cost S4 per dozen. Ora\"•jacob's budget constraint.b. Now suppose that a ll prices increase by10 percent in yeor 2 ond !hot jacob's salaryincreases by 10 percent as well. Draw jacob'sn<:w budget constraint. How would Jacob'soptimnl combination of milk and cookies in year 2compare to his optimal combination in year 17
)ncob buys only milk and cookies.a. In yeor 1, Jocob earns $100, milk costs $2 perqua rt, and cooki es cost S4 per dozen. Ora\"•jacob's budget constraint.b. Now suppose that a ll prices increase by10 percent in yeor 2 ond !hot jacob's salaryincreases by 10 percent as well. Draw jacob'sn<:w budget constraint. How would Jacob'soptimnl combination of milk and cookies in year 2compare to his optimal combination in year 17
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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)ncob buys only milk and cookies. a. In yeor 1, Jocob earns $100, milk costs $2 per qua rt, and cooki es cost S4 per dozen. Ora\"• jacob's budget constraint. b. Now suppose that a ll prices increase by 10 percent in yeor 2 ond !hot jacob's salary increases by 10 percent as well. Draw jacob's n<:w budget constraint. How would Jacob's optimnl combination of milk and cookies in year 2 compare to his optimal combination in year 17 |
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