Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 6, Problem 1.2P
(a)
To determine
The budget constraints
(b)
To determine
Does the choice fits with in the budget constrain.
(c)
To determine
The budget constraints
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8. Problems and Applications Q8
Consider your decision about how many hours to work.
The following graph shows your budget constraint assuming that you pay no taxes on your income.
On the following graph, show the effect of a 15 percent income tax on your budget constraint.
Deborah is awake for 100 hours per week.
Use the green line (triangle symbol) to draw Deborah's budget constraint if she earns $12 per hour. Then use the blue line (circle symbol) to draw her budget constraint if she earns $16 per hour. Finally, use the purple line (diamond symbol) to draw her budget constraint if she earns $20 per hour.
Use this information to answer the following 4 questions: Marie has a weekly budget of $24,which she likes to spend on magazines and pies.24. If the price of a magazine is $4 each, what is the maximum number of magazines she couldbuy in a week?25. If the price of a pie is $12, what is the maximum number of pies she could buy in a week?26. Draw Marie’s budget constraint with pies on the horizontal axis and magazines on thevertical axis. What is the slope of the budget constraint?27. What is Marie’s opportunity cost of purchasing a pie?
I need help with number 26 and 27.
Chapter 6 Solutions
Principles of Economics (12th Edition)
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- consider your decision about how many hours to work. a. draw your budget assuming that you pay no takes on your income. on the diagram, draw another budget constraint assuming that you pay 15% tax. b. show how the tax might lead to more hours of hours,fewer hours or the same number of hours. explain.arrow_forwardGraph is necessaryarrow_forwardi need the answer quicklyarrow_forward
- Antonio buys five new college textbooks during his first year at school at a cost of $80 each. Used books cost only $50 each. When the bookstore announces that there will be a 10 percent increase in the price of new books and a 5 percent increase in the price of used books, Antonio’s father offers him $40 extra. What happens to Antonio budget line when the price of new books increases by 10 percent? Is Antonio worse or better off after the price changearrow_forwardWhat is Mauricio's budget for monkeys and unicycles?arrow_forwardKimiko is planning a party to celebrate her birthday. She has decided to serve sushi and yakitori meat skewers. Each serving of sushi is $8 and each yakitori skewer is $2. Kimiko has $240 to spend on the party. Please graph her budget line. Her friend, Barry, thinks there will not be enough food, so he gives Kimiko $80 more to spend on the party (she now has $320). How will this affect the budget line? a. There will be a parallel shift of the budget line away from the origin. b. There will be a parallel shift of the budget line towards the origin. c. There will be an outward shift of point A only. d. There will be an outward shift of point B only.arrow_forward
- Consider the following budget constraint. Dennis spends all his money on sweaters and sweatshirts. If the price of sweaters is $15, how much money does Dennis have in his budget? Sweatshirts 8 7 6 5 4 3 2 1 1 0 1 $178 $105 $7 $75 2 3 4 5 6 7 8 9 Sweatersarrow_forwardconsider your decision about how many hours to work. draw your budget constraint assuming that you pay no taxes on your income. on the same diagram, draw another budget constraint assuming that you pay 15 percent tax. show how the tax might lead to more hours of work,fewer hours or the same number of hours.explain.arrow_forwardBrenda wants to buy new car and has a budget of $25,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 1 to 10, with 10 representing either the most styling or best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $6,250. She also observed that as the gas-mileage index rises by one unit, the price of the car increases by $5,000. Illustrate the various combinations of style (S) and gas mileage (G) that Brenda could select with her $25,000 budget. Using the line drawing tool, illustrate Brenda's budget line. Label this line 'Budget Line'. Carefully follow the instructions above, and only draw the required object. Suppose Brenda's preferences are such that she always receives two times as much satisfaction from an extra unit of styling as she does from gas mileage. What type of car will Brenda choose?…arrow_forward
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