Quantity of cola 600 400 200 300 Quantity of pizza A consumer has a total budget of $800 to spend on pizza and cola. 1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line. 2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his budget line?
Quantity of cola 600 400 200 300 Quantity of pizza A consumer has a total budget of $800 to spend on pizza and cola. 1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line. 2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his budget line?
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 13PA
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Question
![Quantity
of cola
600
400
300
Quantity
of pizza
200
A consumer has a total budget of $800 to spend on pizza and cola.
1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line.
2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his
budget line?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1e740ae8-3434-4495-a762-8e6c47717b21%2Fd443a60b-9791-4fd7-8cfd-2a52978c1494%2F02r2dnb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Quantity
of cola
600
400
300
Quantity
of pizza
200
A consumer has a total budget of $800 to spend on pizza and cola.
1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line.
2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his
budget line?
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