Question #2: Budget Constraints (Total = 8 marks; 2 marks each) For each question below, draw the budget constraint. Be sure to label the all the axis values and the slope of each segment of the budget line, if applicable. Please plot good x on the horizontal axis. a) You consume two goods, x and y, and your income is m = $200, Px = $1 and Py = $2. The government imposes a tax of $0.5 per unit of x if x≥ 50. This tax is not applied for x < 50.

Question #2: Budget Constraints (Total = 8 marks; 2 marks each) For each question below, draw the budget constraint. Be sure to label the all the axis values and the slope of each segment of the budget line, if applicable. Please plot good x on the horizontal axis. a) You consume two goods, x and y, and your income is m = $200, Px = $1 and Py = $2. The government imposes a tax of $0.5 per unit of x if x≥ 50. This tax is not applied for x < 50.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 6QFR

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Suppose you have $100 to spend on Skittles and M&Ms. The price of Skittles is $5.00 and the price of M&Msis $1.00.(a) Write the budget constraint and draw the budget constraint on a graph that has M&Ms on the verticalaxis. (b) Assuming you spend all of your money on skittles and M&Ms. If you bought 10 M&Ms how manySkittles did you purchase? (c) Suppose the price of skittles increases from $5.00 to $6.00. Rewrite the budget constrain and draw thenew budget line, including and indicating intercepts and the slopes. (d) Suppose the price of Skittles drops from $5.00 to $1.00. You are limited to only a maximum of 75skittles. Draw this new budget constraint on the same graph from your answers in part (a) and (c).
Describe and graph your own example of a budget constraint using two goods (don’t forget to label your axes). In your example, make sure to state what the budget is, the price of the two goods, what the slope of the budget constraint equals (make sure to include the correct sign), and interpret what the slope represents.
Assume that you are on an island where there are only two commodities—coconuts and pineapples—and you can spend your income only on these two foods. If the price of coconuts is Pc and the price of pineapples is Pp and your income is I, draw a budget constraint, carefully labelling the points on the two axes and where the attainable and unattainable portions of consumption are. Note: you can choose any Pc and Pp that you like—they do not have to be equal. What is the slope of this budget constraint? What is the economic interpretation of the slope? Now, let’s bring a little more structure to this diagram. Let I=£200, Pc=£1 per coconut and Pp=£2 per pineapple. Draw a new diagram using these numbers. Consider these questions: How many coconuts can you buy if you do not buy any pineapples? How many pineapples can you buy if you do not buy any coconuts? What is the slope and what economic information does it give us? Show the point of 100 coconuts and 100 pineapples on your diagram. Can…
Parts d-h please!
Write out the standard form of a budget constraint (meaning only with variables, no numbers). Then, write a budget constraint that represents the following situation and graph it (LABEL YOUR AXES, INTERCEPTS, AND SLOPE!!!!!) The price of apples is $2 per pound and the price of bananas is $3 per pound. You have $25 available to spend on apples and bananas combined.
#1
Jeremy consumes only two goods, X and Y, and faces the following utility function: U = XY The marginal utity for X is MUx -Y and the marginal utility for Y is MUy = X. His initial budget is $800, and the prices of X and Y are $12.5 and $2. %3D "Most answers should be round numbers. Answer everything to 1 decimal place, if need be What are the amounts of X and Y that will maximize Joremy's utility? X= Number Y= Number How many X and Y will Jeremy choose if the price of X suddenly fell to S8? X- Number Y. Number How many X and Y are in the substitution bundle? X- Number Y. Number What are the break-downs of the prioe change on the amount of X purchased? Subslitution effect Number Income etfect Number
Picture 1 : A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a package of Cup O' Soup for $2 per meal. Her weekly food budget is $60. Assume that she spends equal amounts on both goods. On the following graph, use the green line (triangle symbol) to draw the college student's budget constraint. Then use the black point (plus symbol) to indicate the initial optimum in this case. Picture 2 : Suppose the price of a Cup O' Soup now rises to $3. Assume that the student now spends only 20 percent of her income on dining hall meals. On the preceding graph, use the blue line (circle symbol) to draw the college student's new budget constraint. Then use the grey point (star symbol) to indicate the new optimum in this case. As a result of this price change, the quantity of Cup O' Soup packages consumed ( decreased , increase ) ? This means that Cup O' Soup must be (a normal , an inferior) ? good, and the income effect (…
Don't use pen or paper
Note: show gallons of gas & lbs of apples graph. The answer should be typed.
NOTE: PLEASE ANSWER ASAP!!!
8. Suppose that you are able to consume only two goods, coffee and donuts. Use a graphical and written analysis to answer the following questions. Draw your budget constraint for coffee and donuts. Please put donuts per week on the y-axis and cups of coffee per week on the x-axis. Label all axes. Illustrate the optimal bundle E. b. Suppose you learn that coffee will prolong your life. Illustrate this new information on the budget constraint in your graph. Identify the new equilibrium bundle E'. Do you now drink more or less coffee than before the new information? Why? d. Are you better off, worse off, or as well off at the new equilibrium as the old? How can you be sure of your answer? a. с.