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 1.3P
(a)
To determine
The budget constraint.
(b)
To determine
The budget constraint.
(c)
To determine
The budget constraints
(d)
To determine
The budget constraint when the
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Luke has a monthly income of $80. He spends this money making telephone calls from home (measured in minutes of calls) and on other goods. His mobile phone company offers him two plans:
Plan A: Pay no monthly fee and make calls for $0.50 per minute.
Plan B: Pay a $30 monthly fee and make calls for $0.1 per minute.
If Plan A is better for him, what is the set of baskets he may purchase if his behavior is consistent with utility maximization? Make sure that your answer is exact, using set notations and/or a clearly labeled graph.
As described in Exercise 8.1, Lucy wants carpets and paintings for here office. Her company has given her a budget of $7200 for this purpose. Persian carpets of the size that she wants can be purchased for $900 each and paintings from a local Native American artist cost $400 each.
Using Excel's charting tool, draw Lucy's budget constraint if her budget is $5000. Use 0, 1, 2, 3, and 5 carpets as possible quantities. Put carpets on the horizontal axis and paintings on the vertical axis.
Use the following information to answer questions 1 through 8:
A student has a monthly budget of $120 to spend on either burritos, which cost $6 each, or sodas, which cost $4 each.
What is the largest number of burritos that the student could afford to purchase in one month?
What is the largest number of sodas the student could afford to purchase in one month?
Chapter 6 Solutions
Principles of Economics (12th Edition)
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