Part III To attract cricket fans back after Covid as well as to cover revenue shortfall, the local cricket association has decided to offer a season ticket for $144. Tickets are now NO LONGER sold separately for each game (i.e., the season ticket is the only option if one wants to watch cricket at SCG). With the season ticket Ashwin can watch as many cricket games as he wants. (C) Draw Ashwin's new budget constraint for money, and shade in his new affordable set of bundles with horizontal lines. (d about Ashwin? Is Sam better off or worse off with the introduction of season ticket? What
Part III To attract cricket fans back after Covid as well as to cover revenue shortfall, the local cricket association has decided to offer a season ticket for $144. Tickets are now NO LONGER sold separately for each game (i.e., the season ticket is the only option if one wants to watch cricket at SCG). With the season ticket Ashwin can watch as many cricket games as he wants. (C) Draw Ashwin's new budget constraint for money, and shade in his new affordable set of bundles with horizontal lines. (d about Ashwin? Is Sam better off or worse off with the introduction of season ticket? What
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please just solve for part iii,the solutions of part i and ii are given as references!!Please just solve for part iii,the solutions of part i and ii are given as references!!Please just solve for part iii,the solutions of part i and ii are given as references!!Please just solve for part iii,the solutions of part i and ii are given as references!!
Transcribed Image Text:Please just solve for part III, the solutions of part i and ii are given as references!!!!!!
Ashwin likes to spend her spare time in summer in one of two ways:
(i) watching cricket (x) at Sydney Cricket Ground or
(ii) watching movies (y) at Ritz cinema.
In choosing how to entertain herself, she considers both constraints---money and time.
Part I
Ashwin has 48 hours of spare time in a month. A cricket game runs for 8 hours, while each
visit to the movies takes up 4 hours. Each month, Ashwin also has $324 to spend on
entertainment. A ticket for a cricket game costs $45. A visit to the movie costs $36.
Write down Ashwin's budget constraint and time constraint.
(a)
(b)
Draw Ashwin's budget constraint and time constraint in a clearly labelled
diagram. Label all axis intercepts in the two axes (x and y) and the point of intersection of the
two budget lines. Shade the set of bundles that Ashwin can afford (those satisfying both his
time and money constraints) with vertical lines.
Part II
Sam---a friend of Ashwin---has the same amount of spare time (48 hours per month) and
same amount of money to spend on entertainment ($324 per month). He faces the same
constraints as Ashwin. However, Ashwin and Sam have slightly different preferences over
cricket (x) and movies (y).
Sam's utility function: U(x,y) = x + y
• Ashwin's utility function: V(x,y) = min{x,y}
Each maximizes their own utility.
a) What is/are the utility maximizing bundle/s for Sam?
b) What is/are the utility maximizing bundles for Ashwin?
Part III
To attract cricket fans back after Covid as well as to cover revenue shortfall, the local cricket
association has decided to offer a season ticket for $144. Tickets are now NO LONGER sold
separately for each game (i.e., the season ticket is the only option if one wants to watch
cricket at SCG). With the season ticket Ashwin can watch as many cricket games as he
wants.
(C)
Draw Ashwin's new budget constraint for money, and shade in his new
affordable set of bundles with horizontal lines.
(d
about Ashwin?
Is Sam better off or worse off with the introduction of season ticket? What
Transcribed Image Text:Part I
a) The
budget-constrained shows the amount of money available by the consumer to purchase in
the market and time-constrained is the limitation of time of spending on a particular activity.
b) Both diagram shows A's budget limitation and time limitation on watching movie and cricket.
Part II
a) The optimal bundle for S to maximize the utility is (4,4).
b) The optimal bundle for A to maximize its utility is (4,4) because both have the same budget line.
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