Assume that the quantity of apples is measured on the horizontal axis and the quantity of oranges is measured on the vertical axis. If the budget line rotates upward while keeping the same horizontal intercept, it implies that

Jeff spends all of his money on housing (H) and other stuff (S) and has a diminishing marginal rate of substitution between housing and stuff. Jeff used to live and work in a small town where housing prices were relatively low. His company has decided to transfer him to a large city where housing prices are higher. (For simplicity, assume that all other prices are the same.) Using a diagram, explain to Jeff's company how to find the amount it needs to raise his salary to keep him just as well after the 2. transfer as he was before. Tridor

A basket of goods for a given consumer includes two goods, X and Z. Consumer income is equal to $200 and the prices of these two goods are as follows: Px = $20 Pz = $25. Suppose that over the course of a year, the price of good X increases by 150% and the price of good Z decreases by 50%. Use the line drawing tool to show this change in prices by drawing a new budget constraint for the same level of income. Label this line 'L²₁. Carefully follow the instructions above, and only draw the required object. Using the income ratio and the consumption bundle R shown in the diagram to the right, what is the rate of inflation?%. (Enter a numeric response using a real number rounded to two decimal places.) C Good Z 16- 14- 12- 10- 8- 6- 4. 2- 0- 0 -2 4 | 2 + R 6 8 Good X 10 12 14 16

Henry has $450 to spend on movies and concerts. Suppose the price of a movie ticket is $15 and the price of a concert ticket is $90. Draw Henry's budget line. Your graph should include labels for your axes, and you should note the quantities at which the budget line meets each axis. Label Henry's budget line "BL" Next, suppose that the price of concert tickets drops to $75. Draw Henry's new budget line, and label it 'BL2'.