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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 BC, ($48) 27 0 24 Affordable Region 21 18 15 $24 on Each 12 9 6 BC, ($60) YOGURT (Containers) 3 0 0 + 3 6 9 12 15 18 21 JUICE (Gallons) 24 27 30 33 36

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 BC, ($48) 27 0 24 Affordable Region 21 18 15 $24 on Each 12 9 6 BC, ($60) YOGURT (Containers) 3 0 0 + 3 6 9 12 15 18 21 JUICE (Gallons) 24 27 30 33 36

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section21.1: The Budget Constraint: What The Consumer Can Afford
Problem 1QQ
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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)
Transcribed Image Text: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)
What does the slope of Sam's budget constraint represent? The opportunity cost of an additional gallon of juice in terms of containers of yogurt The cost of an additional container of yogurt in terms of dollars The cost of an additional gallon of juice in terms of dollars The opportunity cost of an additional container of yogurt in terms of gallons of juice Suppose Sam receives $12 from his grandmother and decides to dedicate this money to buying more juice and yogurt. Using the green line (triangle symbol), draw Sam's new budget constraint on the preceding graph. True or False: Sam faces the same tradeoff between juice and yogurt. True False
Transcribed Image Text:What does the slope of Sam's budget constraint represent? The opportunity cost of an additional gallon of juice in terms of containers of yogurt The cost of an additional container of yogurt in terms of dollars The cost of an additional gallon of juice in terms of dollars The opportunity cost of an additional container of yogurt in terms of gallons of juice Suppose Sam receives $12 from his grandmother and decides to dedicate this money to buying more juice and yogurt. Using the green line (triangle symbol), draw Sam's new budget constraint on the preceding graph. True or False: Sam faces the same tradeoff between juice and yogurt. True False
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