Scenario: Suppose that you are on a desert island and possess exactly 20 coconuts. Your neighbor, Friday, is a fisherman, and he is willing to trade 2 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut. The slope of budget line from trading with Friday is -0. 5. This shows for every coconut you give up, Friday must give up 2 fish. -The slope of budget line from trading with Kwame is -0. 3. So for every coconut you give up, Kwame must give up three fish. 1) Which budget line features a larger set of attainable combinations of coconuts and fish?

Scenario: Suppose that you are on a desert island and possess exactly 20 coconuts. Your neighbor, Friday, is a fisherman, and he is willing to trade 2 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut. The slope of budget line from trading with Friday is -0. 5. This shows for every coconut you give up, Friday must give up 2 fish. -The slope of budget line from trading with Kwame is -0. 3. So for every coconut you give up, Kwame must give up three fish. 1) Which budget line features a larger set of attainable combinations of coconuts and fish?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 1P

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Question

Scenario: Suppose that you are on a desert island and possess exactly 20 coconuts. Your neighbor, Friday, is a fisherman, and he is willing to trade 2 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut.

The slope of budget line from trading with Friday is -0. 5. This shows for every coconut you give up, Friday must give up 2 fish.

-The slope of budget line from trading with Kwame is -0. 3. So for every coconut you give up, Kwame must give up three fish.

1) Which budget line features a larger set of attainable combinations of coconuts and fish?

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Suppose that you are on a desert island and possess exactly 20 coconuts. Your neighbor, Friday, is a fisherman, and he is willing to trade 2 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut. a. On a single figure, draw budget lines for trading with Friday and for trading with Kwame. (Put coconuts on the vertical axis.) b. What is the slope of the budget line from trading with Friday? c. What is the slope of the budget line from trading with Kwame? d. Which budget line features a larger set of attainable combinations of coconuts and fish? e. If you are going to trade coconuts for fish, would you rather trade with Friday or Kwame?
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