What does the slope of Musashi's budget constraint represent?O The opportunity cost of an additional container of yogurt in terms of gallons of juiceO The cost of an additional gallon of juice in terms of dollarsO The cost of an additional container of yogurt in terms of dollarsO The opportunity cost of an additional gallon of juice in terms of containers of yogurtSuppose Musashi receives $24 from his grandmother and decides to dedicate this money to buying more juice and yogurt.Using the green line (triangle symbol), draw Musashi's new budget constraint on the preceding graph.True or False: Musashi faces the same tradeoff between juice and yogurt.O TrueO False 1. An individual's budgetSuppose Musashi has a weekly budget of $24 to spend on juice and yogurt. Juice is priced at $2 per gallon, and yogurt is priced at $6 per container.If Musashi spends his entire $24 on juice, he can buygallons of juice. If he spends his entire $24 on yogurt, he can buycontainersof yogurt.Use the blue line (circle symbol) to plot Musashi's budget constraint on the following graph. Next, use the orange point (square symbol) to shade thearea that represents combinations of juice and yogurt that are affordable for Musashi. Finally, place the black point (plus symbol) on the point onMusashi's budget constraint that corresponds to a scenario in which Musashi spends $12 on each good.Note: Dashed drop lines will automatically extend to both axes.242220BC, ($24)1816Affordable Region1412$12 on Each6.4BC, ($48)46.8101214161824JUICE (Gallons)2220102)YOGURT (Containers)

The budget line shows the combination of two goods that a consumer can afford given the prices of…

Answered: Suppose Musashi has a weekly budget of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose a consumer has a budget for fast-food items of $60 per week and spends this money on two goods, hamburgers and pizzas. Suppose hamburgers cost $10 each and pizzas cost $20. Put the quantity of hamburgers purchased per month on the horizontal axis and the quantity of pizzas purchased per month on the vertical axis. Draw the budget line. What is its slope?
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Rhea is determining how many gallons of milk (M) and loaves of bread (B) to purchase. Use the information in italics to answer the bolded question below: Rhea's marginal utility function for milk: MUN • Rhea's marginal utility function for bread: M = 0.5M-2 MUB = 0.5MB-1/2 • Rhea has $60 to spend on bread and milk. • The price of milk (Pm) is $3/gallon of milk. • The price of bread (Pb) is $1/loaf of bread. • For the sake of computation, assume that bread is the horizontal axis good (i.e., good X) and milk is the vertical axis good (i.e., good Y). When you set up the optimal budget decision rule for Rhea's consumer problem, which of the following statements best describes how much she will buy of both goods at her consumer equilibrium? O For each gallon of milk, Rhea will buy 1/3 loaf of bread. O For each gallon of milk, Rhea will buy 3 loaves of bread. For each gallon of milk, Rhea will buy 1 loaf of bread. O For each gallon of milk, Rhea will buy 6 loaves of bread.
Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M, S) = M2/3 S1/3 and his income is m. The price of Chicken McNuggets is p, and the price of Szechuan sauce is 1. On the same graph, show the income and substitution effects of the increase in p from 1 to 2 on Rick’s consumption of Chicken McNuggets. Are Chicken McNuggets a normal or inferior good for Rick? Explain your answer.
Suppose the utility function for goods x and y is given Utility = U(x,y) = xy +y Suppose price of both x and y is $1. You have total $10 to spend. Suppose price of x changed to $0.5. Price of y and your disposable income remain the same: a. calculates the change in the amount of good x, that is caused by the substitution effect (the effect on consumption due to a change in price holding real income or utility constant). b. calculate the change in the amount of good x, that is caused by the income effect (the effect on consumption due to a change in real income caused by a change in price).
Suppose your classmate Hilary loves to eat dessert-so much so that she allocates her entire weekly budget to apple crisp and pie. The price of one bowl of apple crisp is $1.25, and the price of a piece of coconut crème pie is $5.00. At her current level of consumption, Hilary's marginal rate of substitution (MRS) of apple crisp for pie is 4. In other words, Hilary is willing to sacrifice four bowls of apple crisp for one piece of pie per week. Does Hilary's current consumption bundle maximize her utility? That is, does it make her as well off as possible? If not, how should she change it to maximize her utility? O Hilary could increase her utility by buying more apple crisp and less pie per week. Hilary could increase her utility by buying less apple crisp and more pie per week. O Hilary's current bundle maximizes her utility, and she should keep it unchanged.
Suppose Carlos has to choose between purchasing jewelry and water. Which of the following is the utility-maximizing rule that Carlos should follow while choosing the optimal quantities of these two goods? (Note: In the answer options that follow, MU stands for "marginal utility.") O (MU of Water) x (Price of Water) = (MU of Jewelry) x (Price of Jewelry) O MU of Water = MU of Jewelry MU of Jewelry %3D Price of Water MU of Water Price of Jewelry MU of Jewelry Price of Jewelry MU of Water %3D Price of Water Since water costs little and jewelry is expensive, it must follow that when people choose their optimal quantities of water and jewelry to purchase, the marginal utility they receive from the last piece of jewelry they buy is than the marginal utility they receive from the last gallon of water they buy.
MICROECONOMICS Clara is leaving for the university restaurant with 3000 HUF in her pocket. Clara is only interested in two things; grilled chicken (x) and salad (y). One slice of grilled chicken costs 300 HUF and the price of 100 grams of salad is 500 HUF. What is the slope of Clara's budget line assuming that she spends her entire budget on these two items and she measures her consumption of grilled chicken on the horizontal axis and salad on the vertical one? (Please use two decimals in your answer.)
A consumer has an annual budget constraint for two goods: “housing sq. ft." and "$ for everything else". Draw the budget constraint for this consumer if income (v) = $50,000 and price per sq. ft. of housing, ph, is S200. Please be sure to fully label your graph (i.e., slope, intercept, etc.). Note: plot "housing sq. ft." on the x-axis. How would this consumer's budget line change if she received a $5,000 raise and the price of housing increased to $250? Include a graph with your answer. How did the economic rate of substitution (ERS) between housing and $ for everything else change when pa changed? Please interpret the ERS both before and after the price change.
Q.3. Suppose a student has monthly income of Rs 10,000. He consumes only two commodities Sandwich and Shawarma. The cost of Sandwich is Rs 50 each, and the cost of Shawarma is Rs 100 each.a) Draw the student’s budget constraint. What is the slope of his budget constraint? b) Suppose student gets a raise, so his income increases from Rs 10,000 to Rs 12,000. Show what happens to consumer optimal consumption choice if both Sandwich and Shawarmaare normal goods. Now show what happens if Sandwich is an inferior good.c) Suppose consumer income decreases to Rs. 8,000. Show what happens if both Shawarmaand Sandwich are normal goods. Now show what happens if Sandwich is an inferior good.
Suppose an individual is currently spending all of their income on a bundle of books and pizza, but they are not sure whether the bundle maximizes their utility. Assume the individual has a strictly diminishing marginal rate of substitution over these two goods. At their current bundle of books and pizza, the individual's marginal utility from consuming books is 6 utils and their marginal utility from consuming pizza is 3 utils. If the current price of a book is $12 and the price of a pizza is $7, which of the following statements must be true: A. The individual can increase their utility by consuming more books and less pizza B. The individual is maximizing their utility C. The individual can increase their utility by consuming more pizza and fewer books
James Bond consumes two goods: vodka (x) and martini (y). His preferences are described by the utility function U(x,y) = (1x+9)y. Calculate the value of the marginal rate of substitution in the point (2;2). Please use 2 decimals in your answer.

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