Ria earns an income of $3,000 per month. Assume that she can either buy 5 laptops or 10 mobile phones with her income. The price of laptops is $600, and the price of the mobile phone is $300. Suppose Ria's income increases by 20% and the price of the laptops decreases to $450, what will be the effect on the budget constraint? 1.) Using the line drawing tool, draw a new budget constraint representing the given effects. Carefully follow the instructions above and only draw the required object. The new budget constraint has a different than the initial budget constraint. I Quantity of mobile phone 12 11- 10- 10 2- 1- to -N 4 Quantity of laptop 9 10 11 13

Ria earns an income of $3,000 per month. Assume that she can either buy 5 laptops or 10 mobile phones with her income. The price of laptops is $600, and the price of the mobile phone is $300. Suppose Ria's income increases by 20% and the price of the laptops decreases to $450, what will be the effect on the budget constraint? 1.) Using the line drawing tool, draw a new budget constraint representing the given effects. Carefully follow the instructions above and only draw the required object. The new budget constraint has a different than the initial budget constraint. I Quantity of mobile phone 12 11- 10- 10 2- 1- to -N 4 Quantity of laptop 9 10 11 13

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Antonio buys five new college textbooks during his first year at school at a cost of $80 each. Used books cost only $50 each. When the bookstore announces that there will be a 50 percent increase in the price of new books and a 50 percent increase in the price of used books, Antonio's father offers him $200 extra. What happens to Antonio's budget line? 1.) Using the line drawing tool, graph Antonio's original budget line. Label this line L₁. 2.) Using the line drawing tool, then graph Antonio's new budget line. Label this line L₂. Carefully follow the instructions above, and only draw the required objects. CIT New Books 12- 11- 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- 0- 0 1 2 3 5 6 8 9 10 11 12 Used Books
Matt has $14 in income that he devotes entirely towards caffeine purchases, specifically coffee and tea. Tea costs $4/cup and coffee costs $5/cup. Also, tea is subject to a quantity tax of $1/cup, and coffee is subject to a value tax of 0%. By how much will the slope of Matt's budget constraint change if his income were to increase from $14 to $37?
The nearby graph shows Charlie's budget constraint for purchases of shoes and purses. Number of 12 purses 10 8 6 4 2 0 Your answer Budget line with discount Budget line no discount 0.5 1 1.5 2 2.5 Number of pairs of shoes If Charlie's monthly budget for shoes and purses is $100 and they buy more than 2 purses, the price of purses is $. _. (Enter your answer as integers without the dollar sign.)
7) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of crackers declines? The BC shifts to the left (down). The BC shifts to the right (up). The BC rotates such that it intersects the horizontal axis at the same point as before and intersects the vertical axis at a lower point. The BC rotates such that it intersects the horizontal axis at the same point as before and intersects the vertical axis at a higher point.
Suppose Lorenzo has a weekly budget of $48 to spend on ranch dressing and peanut butter. Ranch dressing is priced at $4 per bottle, and peanut butter is priced at $6 per jar. If Lorenzo spends his entire $48 on ranch dressing, he can buy jars of peanut butter. buy Use the blue line (circle symbol) to plot Lorenzo's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of ranch dressing and peanut butter that are affordable for Lorenzo. Finally, place the black point (plus symbol) on the point on Lorenzo's budget constraint that corresponds to a scenario in which Lorenzo spends $24 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 24 22 20 18 2 0 + 0 2 4 12 14 16 18 20 22 bottles of ranch dressing. If he spends his entire $48 on peanut butter, he can 6 8 RANCH DRESSING (Bottles) O True False BC, ($48) O Affordable Region $24 on Each What does the slope of…
Sarah likes basketball games and going to movies. Every month he has $480 to spend on the two activities. Ticket price of a basketball game is $15 and price of a ticket to movies is 12$. Write the budget constraint equation and draw the budget constraint for Sarah.
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Suppose Sam has a weekly budget of $48 to spend on juice and yogurt. Juice is priced at $4 per gallon, and yogurt is priced at $2 per container. gallons of juice. If he spends his entire $48 on yogurt, he can buy containers of If Sam spends his entire $48 on juice, he can buy yogurt. Use the blue line (circle symbol) to plot Sam's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of juice and yogurt that are affordable for Sam. Finally, place the black point (plus symbol) on the point on Sam's budget constraint that corresponds to a scenario in which Sam spends $24 on each good. Note: Dashed drop lines will automatically extend to both axes. ? 36 33 30 27 24 21 18 12 9 6 3 YOGURT (Containers) 0 0 + 3 6 9 12 15 18 21 JUICE (Gallons) 24 27 30 33 36 BC, ($48) 0 Affordable Region $24 on Each BC₂ ($60)