A recent newspaper circular advertised the following special on tires: "Buy three, get the fourth tire for free-limit one free tire per customer." If a consumer has $360 to spend on tires and other goods and each tire usually sells for $40, plot this consumer's opportunity set when this special is offered. Instruction: If the opportunity set has any kinks, be sure to plot all the points where the kinks occur, in addition to the points where the line crosses the intercepts. Graph the budget set from where Tires= 0 to where it crosses the X-axis. Income Spent on Other Goods 400-1 380- 360- 340- 320- 300- 280- 260- 240- 220- 200- 180- 160- 140- 120- 100- 80- 80- 40- 20- 0 Opportunity Set Budget Set

A recent newspaper circular advertised the following special on tires: "Buy three, get the fourth tire for free-limit one free tire per customer." If a consumer has $360 to spend on tires and other goods and each tire usually sells for $40, plot this consumer's opportunity set when this special is offered. Instruction: If the opportunity set has any kinks, be sure to plot all the points where the kinks occur, in addition to the points where the line crosses the intercepts. Graph the budget set from where Tires= 0 to where it crosses the X-axis. Income Spent on Other Goods 400-1 380- 360- 340- 320- 300- 280- 260- 240- 220- 200- 180- 160- 140- 120- 100- 80- 80- 40- 20- 0 Opportunity Set Budget Set

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

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DmISIIng Margifal Otmty n. TOTAL AND MARGINAL UTILITY Reset E UTILITY CALCULATIONS Total Utility Quantity Consumed Total Marginal Utility 70 Utility 60 50 22 40 1 22 30 18 20 40 10 14 2 3 4 54 Quantity Consumed 10 Marginal Utility 4 64 20 6. 10 70 3. 6. -10 6. 72 -20 -2 7 70 Quantity Consumed Quantity Consumed -6 8. 64 8 Prev 1 of 3 Score answer > ...
Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either callher on the land-line phone for five cents per minute or he can drive to see her, at a round-trip cost of $2 in gasolinemoney. He has a total of $10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses ahandy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values inTable 6.6, figure out the points on Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch)and identify his utility-maximizing point
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