The price of good B is twice that of good X. The price of good X is $10.40Use the line drawing tool to plot three separate budget constraints for incomelevels equal to $400 (L'), $500 (L²), and $600 (L³) on the diagram to the right.Property label the lines.3530-Carefully follow the instructions above, and only draw the required objects.25-B 20-15-10-IC5-IC1020304050607080étvMacBook Air80DIIDDF3F4F5F6F7F8F9F10F1!@23$&*12379.QWERYUASFGH.JKZCVBatoptioncommandcommandoptie.. .-* 00

Answer: Price of good BPB=2×Price of good XPXPB=2×10PB=$20 The budget constraint at an income level…

Answered: The price of good B is twice that 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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7
2) Suppose you have $400 that you can spend on goods 1 & 2. If the price of good 1 is $40, while the price of good 2 is $80, draw a budget line to illustrate your budget constraint (place good 1 on the horizontal and good 2 on the vertical axis). Make sure you label the axes. Also, calculate the slope of this budget line. Slope =
MRS=-20 along Ray 1 , MRS=-15 along Ray 2 Draw this consumer’s budget constraint, BAB, and indifference curve. Be sure to label your graph completely. Ignore all other indifference curves and bundle
Typed and correct answer please. I ll rate
10. Deriving demand from an indifference map Valerie lives in San Francisco and enjoys drinking lattes and eating scones. The price of a latte is held constant at $4 throughout this problem. On the following diagram, the purple curves (I and I2) represent two of Valerie's indifference curves. The lines BL₁ and BL2 show two budget lines. Points X and Y show Valerie's consumer equilibriums subject to these budget lines. QUANTITY OF LATTES 20 18 16 14 12 10 8 6 2 0 ہے + 0 2 + 4 BL 6 8 10 12 QUANTITY OF SCONES 14 BL₁ BL₂ BL 16 18 20 Given the previous graph and knowing the price of a latte is $4, Valerie's budget is Using the budget amount you previously computed, complete the following table by finding the price of a scone when BL₁ represents Valerie's budget line and when BL represents her budget line. Then indicate the quantity of scones consumed in each of those scenarios. Price When Valerie's budget line is... (Dollars per scone) Consumption (Scones) Given the price-quantity…
The nearby graph shows Claudia's budget constraint for purchases of shoes and purses. Claudia's monthly budget for shoes and purses is $100. Claudia's parents have told her that she has too many shoes and is not allowed to buy more than 1 pair a month. If she buys 1 pair of shoes and 1 purse, she will have $_________ left each month. Number of 4.5 purses 4.0 3.5 3.0 2.5 O $50 O $10 O $75 O $25 2. A 1.5 1.0 0.5 0 0.2 0.4 0.6 0.8 1.0 1.2 Number of pairs of shoes
) Suppose there are two goods, X and Y. The price of good X is $5, the price of good Y is $3, and your income is $60. Neatly graph your budget line and label the intercepts. (a) What is the slope of your budget line? (b) How many units of good Y do you give up per unit of good X? (c) Suppose the price of good X rises to $6, show what happens to the budget line and label any new intercepts. (d) What is the new slope of the budget line? How many units of good Y do you now give up per unit of good X? (e) Suppose the price of good X only rises to $6 once you have purchased six units of good X. In other words, it is $5 per unit for the first six units and $6 per unit thereafter. Make a new graph of this "kinked" budget constraint.
PROBLEM (1) Suppose a consumer has just enough money to afford the bundle of 3 apples and 2 oranges, and similarly she also has just enough money to afford the bundle of 2 apples and 4 oranges. (a) Denoting the number of apples with x and oranges with y, plot the two given bundles on a graph, and calculate the relative price of apples; px/ py. (b) If she buys only apples with her budget, how many can she buy? If she buys only oranges, how many can she buy? Write down the budget equation for the consumer. (Notice that knowing two points on the budget line, you can write down the budget equation, even though you weren't given the prices nor the income explicitly!) (c) Suppose MUx = 20 and MUY = 30 at some point on the budget line. Is she maximizing utility by choosing this bundle? If not, should she buy fewer apples (and more oranges), or more apples (and fewer oranges), to increase her utility? (d) Forget about (c); instead, you learn that her utility function is u(x,y) = Axy³. What is…
Q28
Which budget constraint panel in Figure below shows the combined effects of an increase in the price of oranges and a decrease in the price of apples? (e) (c) Oranges (a) (b) (d) Oranges Oranges Oranges Oranges Apples Apples Apples Apples Apples O panel a panel b panel c O panel e O none of the above
6 If someone has an income of 20 and he wants to buy Pepsi and hamburgers. Hamburgers are sold in an unusual way. There is only one supplier and the more hamburgers he buys, the higher the price per unit. So, hamburgers cost is a total of 2h^2 (squared) for hamburgers. Pepsi is sold at a price of $2. 1. In this case, write out the budget constraint of hamburgers and Pepsi. 2. His utility function is u(h,p) = 12h + 4p. Draw his 1) budget line and 2) a few indifference curves on a graph. 3. What is the optimal bundle for him?
QUESTION 7 Assume the following is the budget equation for Courtney who spends her income between music concerts and movies: 86 Music Concerts + 85 Movies = 7216 If Music Concerts are measured on the vertical axis, what would be the slope of the budget line ? 2

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