1. An individual's budget Suppose Bob has a yearly budget of $120 to spend on oat milk and peanut butter. Oat milk is priced at $2 per quart, and peanut butter is priced at $6 per jar. If Bob spends his entire $120 on oat milk, he can buy jars of peanut butter. Use the blue line (circle symbol) to plot Bob's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of oat milk and peanut butter that are affordable for Bob. Finally, place the black point (plus symbol) on the point on Bob's budget constraint that corresponds to a scenario in which Bob spends $60 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 120 110 100 90 80 70 60 50 40 30 20 10 0 0 10 20 30 + 40 50 60 70 OAT MILK (Quarts) quarts of oat milk. If he spends his entire $120 on peanut butter, he can buy + + 80 90 + H 100 110 120 BC, ($120) ☐ Affordable Region $60 on Each BC₂ ($240) ?

1. An individual's budget Suppose Bob has a yearly budget of $120 to spend on oat milk and peanut butter. Oat milk is priced at $2 per quart, and peanut butter is priced at $6 per jar. If Bob spends his entire $120 on oat milk, he can buy jars of peanut butter. Use the blue line (circle symbol) to plot Bob's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of oat milk and peanut butter that are affordable for Bob. Finally, place the black point (plus symbol) on the point on Bob's budget constraint that corresponds to a scenario in which Bob spends $60 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 120 110 100 90 80 70 60 50 40 30 20 10 0 0 10 20 30 + 40 50 60 70 OAT MILK (Quarts) quarts of oat milk. If he spends his entire $120 on peanut butter, he can buy + + 80 90 + H 100 110 120 BC, ($120) ☐ Affordable Region $60 on Each BC₂ ($240) ?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 3SQP

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1. An individual's budget Suppose Sean has a weekly budget of $48 to spend on oat milk and peanut butter. Oat milk is priced at $4 per quart, and peanut butter is priced at $2 per jar. If Sean spends his entire $48 on oat milk, he can buy jars of peanut butter. Use the blue line (circle symbol) to plot Sean's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of oat milk and peanut butter that are affordable for Sean. Finally, place the black point (plus symbol) on the point on Sean's budget constraint that corresponds to a scenario in which Sean spends $24 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 38 33 30 27 24 21 18 15 12 8 3 0 ++ 0 + 36 9 12 15 18 21 24 OAT MILK (Quarts) 12 quarts of oat milk. If he spends his entire $48 on peanut butter, he can buy 24 27 30 33 36 BC, ($48) O Affordable Region + $24 on Each BC₂ ($60) ?
Raymond consumes meatloaves and pineapples. He has decided that his monthly budget will be $1500. Suppose that one meatloaf costs $375, while one pineapple costs $150.a. What is the expression for Raymond’s budget constraint? b. Draw a graph of Raymond’s budget line (meatloaf on the y axis). c. Show how Raymond’s budget line changes if the price of pineapples increases to $370 d. Suppose Raymond decides to cut his monthly budget in half.Coincidentally, the next time he shops, he learns that meatloaves and pineapples are on sale for half price. Show what happens to Raymond’s budget line?
Raymond consumes meatloaves and pineapples. He has decided that his monthly budget will be $1500. Suppose that one meatloaf costs $375, while one pineapple costs $150. i. What is the expression for Raymond’s budget constraint? ii. Draw a graph of Raymond’s budget line (meatloaf on the y axis). iii. Show how Raymond’s budget line changes if the price of pineapples increases to $370. iv. Suppose Raymond decides to cut his monthly budget in half. Coincidentally, the next time he shops, he learns that meatloaves and pineapples are on sale for half price. Show what happens to Raymond’s budget line?
Raymond consumes meatloaves and pineapples. He has decided that hismonthly budget will be $1500. Suppose that one meatloaf costs $375, while onepineapple costs $150.i. What is the expression for Raymond’s budget constraint? ii. Draw a graph of Raymond’s budget line (meatloaf on the y axis).
1. Suppose Frank enjoys traveling and his utility is a function of the number of airplane trips he takes and the number of bus rides he takes. His utility function is given by U(b,p) = 3b0-4p0.8. A trip on a plane costs $400, a trip on the bus costs $50 and Frank has $3,000 to spend on travel. a. Draw Frank's budget line on a graph with bus trips on the vertical axis. b. Calculate AND INTERPRET the slope of Frank's budget line. c. Draw a representative indifference curve on your graph and provide a function that describes the slope of this indifference curve (i.e., find Frank's marginal rate of substitution). What is the INTERPRETATION of the marginal
Raymond consumes meatloaves and pineapples. He has decided that hismonthly budget will be $1500. Suppose that one meatloaf costs $375, while one pineapple costs $150. What is the expression for Raymond’s budget constraint? Draw a graph of Raymond’s budget line (meatloaf on the y axis).