The budget constraint of the consumer.

Question

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Answer 1

Question

Chapter 21, Problem 1QR

To determine

The budget constraint of the consumer.

Expert Solution & Answer

Explanation of Solution

The budget constraint is the constraint which is due to the budget of the individual. The human wants and needs are unlimited and when the budget of the individual is not unlimited, it will lead to the constraint of needs and this constraint raised due to the limited budget is known as the budget constraint of the individual. Thus, a budget constraint will represent all the possible combinations of two commodities that an individual can consume at the given market prices and with all his income in hand.

Here, the income of the person is given as $3,000, the price of per glass wine is $3 and the price of cheese is $6. Thus, when the consumer spends her entire income on the purchase of cheese, the quantity that she can receive can be calculated by dividing the income with per pound price as follows:

QuantityCheese received=IncomePer pound price=3,0006=500

Thus, when she spends all her income on cheese, she can buy 500 pounds of cheese. When she spends all her income on the wine, the quantity can be calculated by replacing the price of cheese with that of wine as follows:

QuantityWine received=IncomePer glass price=3,0003=1,000

Thus, when she spends all her income on wine, she can receive 1,000 glasses of wine.

The budget constraint represents all the combinations of these two goods ranging between 500 pounds of cheese and no wine to no cheese and 1,000 glasses of wine. The vertical axis represents wine and the horizontal represents cheese on our diagram. The 500 pounds of cheese and no wine point represent the horizontal intercept and the no cheese and 1,000 glasses of wine represent the vertical intercept. The budget constraint can be drawn as follows:

Principles of Economics, 7th Edition (MindTap Course List), Chapter 21, Problem 1QR

The slope of the budget constraint is the rise over the run. It can be calculated by dividing the negative vertical intercept (represented by –b) by the horizontal intercept (represented by a) as follows:

Slope of Budget constraint=−ba=−Quantity of WineQuantity of Cheese=−1,000500=−2

Thus, the slope of the budget constraint is -2.

Economics Concept Introduction

Concept introduction:

Budget constraint: It represents all the combinations of two goods that the consumer can consume with the given price level and the income in the hands of the individual.

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Answer 2

Question

Chapter 21, Problem 1QR

To determine

The budget constraint of the consumer.

Expert Solution & Answer

Explanation of Solution

The budget constraint is the constraint which is due to the budget of the individual. The human wants and needs are unlimited and when the budget of the individual is not unlimited, it will lead to the constraint of needs and this constraint raised due to the limited budget is known as the budget constraint of the individual. Thus, a budget constraint will represent all the possible combinations of two commodities that an individual can consume at the given market prices and with all his income in hand.

Here, the income of the person is given as $3,000, the price of per glass wine is $3 and the price of cheese is $6. Thus, when the consumer spends her entire income on the purchase of cheese, the quantity that she can receive can be calculated by dividing the income with per pound price as follows:

QuantityCheese received=IncomePer pound price=3,0006=500

Thus, when she spends all her income on cheese, she can buy 500 pounds of cheese. When she spends all her income on the wine, the quantity can be calculated by replacing the price of cheese with that of wine as follows:

QuantityWine received=IncomePer glass price=3,0003=1,000

Thus, when she spends all her income on wine, she can receive 1,000 glasses of wine.

The budget constraint represents all the combinations of these two goods ranging between 500 pounds of cheese and no wine to no cheese and 1,000 glasses of wine. The vertical axis represents wine and the horizontal represents cheese on our diagram. The 500 pounds of cheese and no wine point represent the horizontal intercept and the no cheese and 1,000 glasses of wine represent the vertical intercept. The budget constraint can be drawn as follows:

Principles of Economics, 7th Edition (MindTap Course List), Chapter 21, Problem 1QR

The slope of the budget constraint is the rise over the run. It can be calculated by dividing the negative vertical intercept (represented by –b) by the horizontal intercept (represented by a) as follows:

Slope of Budget constraint=−ba=−Quantity of WineQuantity of Cheese=−1,000500=−2

Thus, the slope of the budget constraint is -2.

Economics Concept Introduction

Concept introduction:

Budget constraint: It represents all the combinations of two goods that the consumer can consume with the given price level and the income in the hands of the individual.

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Answer 3

Question

Chapter 21, Problem 1QR

To determine

The budget constraint of the consumer.

Expert Solution & Answer

Explanation of Solution

The budget constraint is the constraint which is due to the budget of the individual. The human wants and needs are unlimited and when the budget of the individual is not unlimited, it will lead to the constraint of needs and this constraint raised due to the limited budget is known as the budget constraint of the individual. Thus, a budget constraint will represent all the possible combinations of two commodities that an individual can consume at the given market prices and with all his income in hand.

Here, the income of the person is given as $3,000, the price of per glass wine is $3 and the price of cheese is $6. Thus, when the consumer spends her entire income on the purchase of cheese, the quantity that she can receive can be calculated by dividing the income with per pound price as follows:

QuantityCheese received=IncomePer pound price=3,0006=500

Thus, when she spends all her income on cheese, she can buy 500 pounds of cheese. When she spends all her income on the wine, the quantity can be calculated by replacing the price of cheese with that of wine as follows:

QuantityWine received=IncomePer glass price=3,0003=1,000

Thus, when she spends all her income on wine, she can receive 1,000 glasses of wine.

The budget constraint represents all the combinations of these two goods ranging between 500 pounds of cheese and no wine to no cheese and 1,000 glasses of wine. The vertical axis represents wine and the horizontal represents cheese on our diagram. The 500 pounds of cheese and no wine point represent the horizontal intercept and the no cheese and 1,000 glasses of wine represent the vertical intercept. The budget constraint can be drawn as follows:

Principles of Economics, 7th Edition (MindTap Course List), Chapter 21, Problem 1QR

The slope of the budget constraint is the rise over the run. It can be calculated by dividing the negative vertical intercept (represented by –b) by the horizontal intercept (represented by a) as follows:

Slope of Budget constraint=−ba=−Quantity of WineQuantity of Cheese=−1,000500=−2

Thus, the slope of the budget constraint is -2.

Economics Concept Introduction

Concept introduction:

Budget constraint: It represents all the combinations of two goods that the consumer can consume with the given price level and the income in the hands of the individual.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 21, Problem 1QR

To determine

The budget constraint of the consumer.

Expert Solution & Answer

Explanation of Solution

The budget constraint is the constraint which is due to the budget of the individual. The human wants and needs are unlimited and when the budget of the individual is not unlimited, it will lead to the constraint of needs and this constraint raised due to the limited budget is known as the budget constraint of the individual. Thus, a budget constraint will represent all the possible combinations of two commodities that an individual can consume at the given market prices and with all his income in hand.

Here, the income of the person is given as $3,000, the price of per glass wine is $3 and the price of cheese is $6. Thus, when the consumer spends her entire income on the purchase of cheese, the quantity that she can receive can be calculated by dividing the income with per pound price as follows:

QuantityCheese received=IncomePer pound price=3,0006=500

Thus, when she spends all her income on cheese, she can buy 500 pounds of cheese. When she spends all her income on the wine, the quantity can be calculated by replacing the price of cheese with that of wine as follows:

QuantityWine received=IncomePer glass price=3,0003=1,000

Thus, when she spends all her income on wine, she can receive 1,000 glasses of wine.

The budget constraint represents all the combinations of these two goods ranging between 500 pounds of cheese and no wine to no cheese and 1,000 glasses of wine. The vertical axis represents wine and the horizontal represents cheese on our diagram. The 500 pounds of cheese and no wine point represent the horizontal intercept and the no cheese and 1,000 glasses of wine represent the vertical intercept. The budget constraint can be drawn as follows:

Principles of Economics, 7th Edition (MindTap Course List), Chapter 21, Problem 1QR

The slope of the budget constraint is the rise over the run. It can be calculated by dividing the negative vertical intercept (represented by –b) by the horizontal intercept (represented by a) as follows:

Slope of Budget constraint=−ba=−Quantity of WineQuantity of Cheese=−1,000500=−2

Thus, the slope of the budget constraint is -2.

Economics Concept Introduction

Concept introduction:

Budget constraint: It represents all the combinations of two goods that the consumer can consume with the given price level and the income in the hands of the individual.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 21, Problem 1QR

To determine

The budget constraint of the consumer.

Expert Solution & Answer

Explanation of Solution

The budget constraint is the constraint which is due to the budget of the individual. The human wants and needs are unlimited and when the budget of the individual is not unlimited, it will lead to the constraint of needs and this constraint raised due to the limited budget is known as the budget constraint of the individual. Thus, a budget constraint will represent all the possible combinations of two commodities that an individual can consume at the given market prices and with all his income in hand.

Here, the income of the person is given as $3,000, the price of per glass wine is $3 and the price of cheese is $6. Thus, when the consumer spends her entire income on the purchase of cheese, the quantity that she can receive can be calculated by dividing the income with per pound price as follows:

QuantityCheese received=IncomePer pound price=3,0006=500

Thus, when she spends all her income on cheese, she can buy 500 pounds of cheese. When she spends all her income on the wine, the quantity can be calculated by replacing the price of cheese with that of wine as follows:

QuantityWine received=IncomePer glass price=3,0003=1,000

Thus, when she spends all her income on wine, she can receive 1,000 glasses of wine.

The budget constraint represents all the combinations of these two goods ranging between 500 pounds of cheese and no wine to no cheese and 1,000 glasses of wine. The vertical axis represents wine and the horizontal represents cheese on our diagram. The 500 pounds of cheese and no wine point represent the horizontal intercept and the no cheese and 1,000 glasses of wine represent the vertical intercept. The budget constraint can be drawn as follows:

Principles of Economics, 7th Edition (MindTap Course List), Chapter 21, Problem 1QR

The slope of the budget constraint is the rise over the run. It can be calculated by dividing the negative vertical intercept (represented by –b) by the horizontal intercept (represented by a) as follows:

Slope of Budget constraint=−ba=−Quantity of WineQuantity of Cheese=−1,000500=−2

Thus, the slope of the budget constraint is -2.

Economics Concept Introduction

Concept introduction:

Budget constraint: It represents all the combinations of two goods that the consumer can consume with the given price level and the income in the hands of the individual.

Answer 6

Chapter 21, Problem 1QR

To determine

The budget constraint of the consumer.

Expert Solution & Answer

Explanation of Solution

The budget constraint is the constraint which is due to the budget of the individual. The human wants and needs are unlimited and when the budget of the individual is not unlimited, it will lead to the constraint of needs and this constraint raised due to the limited budget is known as the budget constraint of the individual. Thus, a budget constraint will represent all the possible combinations of two commodities that an individual can consume at the given market prices and with all his income in hand.

Here, the income of the person is given as $3,000, the price of per glass wine is $3 and the price of cheese is $6. Thus, when the consumer spends her entire income on the purchase of cheese, the quantity that she can receive can be calculated by dividing the income with per pound price as follows:

QuantityCheese received=IncomePer pound price=3,0006=500

Thus, when she spends all her income on cheese, she can buy 500 pounds of cheese. When she spends all her income on the wine, the quantity can be calculated by replacing the price of cheese with that of wine as follows:

QuantityWine received=IncomePer glass price=3,0003=1,000

Thus, when she spends all her income on wine, she can receive 1,000 glasses of wine.

The budget constraint represents all the combinations of these two goods ranging between 500 pounds of cheese and no wine to no cheese and 1,000 glasses of wine. The vertical axis represents wine and the horizontal represents cheese on our diagram. The 500 pounds of cheese and no wine point represent the horizontal intercept and the no cheese and 1,000 glasses of wine represent the vertical intercept. The budget constraint can be drawn as follows:

Principles of Economics, 7th Edition (MindTap Course List), Chapter 21, Problem 1QR

The slope of the budget constraint is the rise over the run. It can be calculated by dividing the negative vertical intercept (represented by –b) by the horizontal intercept (represented by a) as follows:

Slope of Budget constraint=−ba=−Quantity of WineQuantity of Cheese=−1,000500=−2

Thus, the slope of the budget constraint is -2.

Economics Concept Introduction

Concept introduction:

Budget constraint: It represents all the combinations of two goods that the consumer can consume with the given price level and the income in the hands of the individual.

Answer 7

Chapter 21, Problem 1QR

To determine

The budget constraint of the consumer.

Answer 8

Expert Solution & Answer

Explanation of Solution

The budget constraint is the constraint which is due to the budget of the individual. The human wants and needs are unlimited and when the budget of the individual is not unlimited, it will lead to the constraint of needs and this constraint raised due to the limited budget is known as the budget constraint of the individual. Thus, a budget constraint will represent all the possible combinations of two commodities that an individual can consume at the given market prices and with all his income in hand.

Here, the income of the person is given as $3,000, the price of per glass wine is $3 and the price of cheese is $6. Thus, when the consumer spends her entire income on the purchase of cheese, the quantity that she can receive can be calculated by dividing the income with per pound price as follows:

QuantityCheese received=IncomePer pound price=3,0006=500

Thus, when she spends all her income on cheese, she can buy 500 pounds of cheese. When she spends all her income on the wine, the quantity can be calculated by replacing the price of cheese with that of wine as follows:

QuantityWine received=IncomePer glass price=3,0003=1,000

Thus, when she spends all her income on wine, she can receive 1,000 glasses of wine.

The budget constraint represents all the combinations of these two goods ranging between 500 pounds of cheese and no wine to no cheese and 1,000 glasses of wine. The vertical axis represents wine and the horizontal represents cheese on our diagram. The 500 pounds of cheese and no wine point represent the horizontal intercept and the no cheese and 1,000 glasses of wine represent the vertical intercept. The budget constraint can be drawn as follows:

Principles of Economics, 7th Edition (MindTap Course List), Chapter 21, Problem 1QR

The slope of the budget constraint is the rise over the run. It can be calculated by dividing the negative vertical intercept (represented by –b) by the horizontal intercept (represented by a) as follows:

Slope of Budget constraint=−ba=−Quantity of WineQuantity of Cheese=−1,000500=−2

Thus, the slope of the budget constraint is -2.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept introduction:

Budget constraint: It represents all the combinations of two goods that the consumer can consume with the given price level and the income in the hands of the individual.

Answer 12

Ch. 21.1 - Prob. 1QQ Ch. 21.2 - Prob. 2QQ Ch. 21.3 - Prob. 3QQ Ch. 21.4 - Prob. 4QQ Ch. 21 - Prob. 1QR Ch. 21 - Prob. 2QR Ch. 21 - Prob. 3QR Ch. 21 - Prob. 4QR Ch. 21 - Prob. 5QR Ch. 21 - Prob. 6QR

The budget constraint of the consumer.

The budget constraint of the consumer.

Explanation of Solution

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Chapter 21 Solutions