The blue budget line is for an income of $1000, Px=$5 and Py-$10.At point A the person is evenly dividing his income between purchases ofgood X and Y.At point B, the person is buying 20 units of Good X.Good XGood YO If the person moves from Bundle B to Bundle H, the person is shifting incomecome purchasing Good X to Good Y while keeping total expenditures constantO If the person moves from Bundle B to Bundle H, the person is shifting incomecome purchasing Good Y to Good X while keeping total expenditures constantV At Bundle H, the person is buying less than 20 units of Good X.O At Bundle H., the person is buying less than 20 units of Good Y.

The budget line shows the various combinations of two goods that can be purchased with the given…

Answered: The blue budget line is for an income…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

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.
The graph of the budget line below has dollars on the vertical axis and food on the horizontal axis. Which statement is false? D 100 Food The vertical intercept represents all money available for purchasing. The distance OA shows the amount of money spent on OD amount of food. If the amount of money available is known in this graph, then the absolute and relative price of food is known also. The horizontal intercept represents all the food the consumer could purchase with the budget available.
Suppose that a there are two goods, X and Y. The price of Good X is $5 and the price of Good Y is $10. The seller of Good X offers a deal where if a consumer buys 1 unit of Good X they pay full price, but the second unit of Good X is only $3. Calculate the slope of the budget constraint between 1 unit of Good X and 2 units of Good X.
What is a budget constraint? A consumer has an income of $3000. Soda costs $3 per liter and cheese costs $6 per pound. Draw the consumer's budget constriaint with soda on the vertical axis. What is the slope of the budget constraint?
Suppose that a typical consumer’s utility function is characterized by the following relation between good X and good Y. The consumer’s consumption decision is influence by the price of the respective goods, which requires him 2 birr for each unit of X and 3 birr for each unit of Y and the resource available to him is 160 birr. A construct the budget constraint of this typical consumer Find the optimal consumption of X and Y
Bruno can spend his income on two different goods: smoothies and energy bars. For each of the following three situations, decide if the given consumption bundle is within Bruno’s consumption possibilities. Then decide if it lies on the budget line or not. Smoothies cost $2 each, and energy bars cost $3 each. Bruno has income of $60. He is considering a consumption bundle containing 15 smoothies and 10 energy bars. Smoothies cost $2 each, and energy bars cost $5 each. Bruno has income of $110. He is considering a consumption bundle containing 20 smoothies and 10 energy bars. Smoothies cost $3 each, and energy bars cost $10 each. Bruno has income of $50. He is considering a consumption bundle containing 10 smoothies and 3 energy bars.
a. Create a graph with X on the horizontal axis and Y on the vertical axis. The equation of the budget constraint is: 5X + 10Y = 500 We can rearrange this to solve for Y: Y = (500 - 5X)/10 b. Plot a graph with the point (50, 25), where they spend half their income on each good. c. If the household income doubles to Rs. 1,000, the new budget constraint would be: 5X + 10Y = 1000 Rearranging for Y: Y = (1000 - 5X)/10 d. If after the change the household spends Rs. 200 on Y and Rs. 800 on X, we can plug these values into the budget constraint to solve for X and Y: 5X + 10Y = 1000 5(800) + 10(200) = 1000 This equation is not satisfied, so we can conclude that the household cannot spend Rs. 800 on X and Rs. 200 on Y with the new budget constraint.
By definition, a budget constraint shows the consumption bundles that a consumer can afford. Assume that a college student spends her income on Mc-cheese and CD's. The price of one box of Mc-cheese is $1.00 and the price of one CD is $10.0 . If she has $90 of income, she could choose to consume : a- 10 boxes and 9 CDs b- 30 boxes and 7 CDs c- 25 boxes and 6 CDs d- 25 boxes and 8CDS
Aidan has saved up $80 to spend on toys (T) and candy (C). The price of toys is$20, and the price of candy is $1. Every time Aidan buys (and pays for) 2 toys, he gets onemore toy for free. Draw Aidan’s budget line with candy on the Y-axis and toys on the X-axis.Label all intercepts and possible kink points. please hand draw graph and label
Q8. Jacob's favorite activities are going to baseball games and going to the theater. Jacob's budget for these activities is $600. A ticket to a baseball game costs $15 and a ticket to the theater costs $60. a. Graph Jacob's budget constraint. b. Calculate the slope of Jacob's budget constraint c. How many t total baseball games can Jacob attend if he visits the theater six times? d. Suppose Jacob receives $300 in cash for his birthday and he decides to put all of this money toward his entertainment budget. Draw Jacob's new budget constraint. e. If Jacob now decides to visit the theater ten times, how many baseball games can he attend?
Economics Norton consumes only squash and tomatoes. His utility function is U(x, y) = x
A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.

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