1. Gertrude had a weekly income $9. At that time, a bulla sold for $1 and a drink for$1.50.a) What is Gertrude's real income in terms of bullas?b) What is her real income in terms of drinks?c) What is the relative price of a drink (in terms of bullas)?d) Sketch Gertrude's budget constraint (placing drinks on the vertical axis).e) Suppose she chooses to consume 3 bullas and 4 drinks per week. Is she satisfyingher budget constraint?f)Sketch the budget line if the price of bullas rises to $2 and all other values remainunchanged.g) Sketch the budget line if the price of drinks rises to $3 and all other values remainat their original levels.h)i)Sketch the budget line if Gertrude gets a raise to earn $18 a week and pricesremain at their original levels.Supposes all changes take place together: the price of bullas rises to $2, the price ofdrinks rises to $3, and Gertrude gets a raise to earn $18 a week. How does the newbudget line compare to the original one?

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1. Gertrude had a weekly income of $9. At that time, a bulla sold for $1 and a drink for $1.50. a) What is Gertrude's real income in terms of bullas? b) What is her real income in terms of drinks? c) What is the relative price of a drink (in terms of bullas)?

1. Gertrude had a weekly income of $9. At that time, a bulla sold for $1 and a drink for $1.50. a) What is Gertrude's real income in terms of bullas? b) What is her real income in terms of drinks? c) What is the relative price of a drink (in terms of bullas)?

Microeconomics A Contemporary Intro

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Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

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Question

1. Gertrude had a weekly income $9. At that time, a bulla sold for $1 and a drink for
$1.50.
a) What is Gertrude's real income in terms of bullas?
b) What is her real income in terms of drinks?
c) What is the relative price of a drink (in terms of bullas)?
d) Sketch Gertrude's budget constraint (placing drinks on the vertical axis).
e) Suppose she chooses to consume 3 bullas and 4 drinks per week. Is she satisfying
her budget constraint?
f)
Sketch the budget line if the price of bullas rises to $2 and all other values remain
unchanged.
g) Sketch the budget line if the price of drinks rises to $3 and all other values remain
at their original levels.
h)
i)
Sketch the budget line if Gertrude gets a raise to earn $18 a week and prices
remain at their original levels.
Supposes all changes take place together: the price of bullas rises to $2, the price of
drinks rises to $3, and Gertrude gets a raise to earn $18 a week. How does the new
budget line compare to the original one?

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