Consider a consumer's annual budget constraint for two goods: "everything else" and "tools". When answering the following questions, please be sure to label your graph accordingly. Draw the budget constraint for this consumer if income (v) = $60,000 and the price per tool (p.) is $20. Note: please graph tools along the x-axis. How would this consumer's budget constraint change in she received an additional $1,000 in income? Returning to the original conditions, how would this consumer's budget linc change if she received a $1,000, non-refundable and non-transferable, gift card from Home Depot? Assume Home Depot only sells tools. How does this budget line compare to that from the previous question? Note: The $1,000 gift card can only be spent on tools.

Consider a consumer's annual budget constraint for two goods: "everything else" and "tools". When answering the following questions, please be sure to label your graph accordingly. Draw the budget constraint for this consumer if income (v) = $60,000 and the price per tool (p.) is $20. Note: please graph tools along the x-axis. How would this consumer's budget constraint change in she received an additional $1,000 in income? Returning to the original conditions, how would this consumer's budget linc change if she received a $1,000, non-refundable and non-transferable, gift card from Home Depot? Assume Home Depot only sells tools. How does this budget line compare to that from the previous question? Note: The $1,000 gift card can only be spent on tools.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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