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.

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.

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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 (…

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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.

Suppose the price of pizza is $10, the price of cola is $1, and the consumer's income is $60. In addition, suppose the consumer's budget constraint measures pizza on the horizontal axis and cola on the vertical axis. Refer to Scenario#1. If the price of cola doubles to $2 while both the price of pizza is constant at $10 and the income is constant at $60, then the slope of the budget constraint rises to -5/2 budget constraint intersects the horizontal axis 5 pizzas budget constraint intersects the vertical axis 30 colas budget constraint intersects the horizontal axis at 25 pizzas

Marie has a weekly budget of $24, which she likes to spend on magazines and pies. Calculate: a) If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week? b) If the price of a pie is $12, what is the maximum number of pies she could buy in a week? c) Draw Marie’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint? d) What is Marie’s opportunity cost of purchasing a pie? NOTE: To answer this question simply work your answer in a piece of paper, take a photo of it and upload the file. Remember that this is a problem solving question, hence you must show your work!