Joe won $365,000 a year for life in the state lottery ($1000 per day for life). Use a labor-leisure choice analysis to answer the following questions: a. Show how Joe’s lottery winnings affect the position of his budget line. [Hint: think about the two things Joe “purchases”, goods (G) and relaxation (R). Assume the price of goods is PG (you can assume this is equal to one if that makes the math easier for you) and the “price” of leisure is Joe’s foregone wage (w). It’s also easiest if you think of this in the context of his daily budget constraint.] b. Joe’s utility function for goods per day (G) and hours of leisure (relaxation) per day (R) is U = G + 240R1/2. After

Alex distributes his monthly income of $600 between two goods, movies and food. By spending his entire income on movies, he can enjoy a maximum of 20 movies. On the other hand, by spending his entire income on food he can consume a total of 60 units of food. Assume that food consumption is measured along the horizontal axis and the consumption of movies is measured on the vertical axis. Calculate the slope of Alex's budget line when the price of food increases to $20 while the price of movie remains unchanged. -2/3 - 1.5 -2 -3/4

Consider the market for Netflix Subscriptions. Show graphically and explain using economic intuition, what happens to the market price and quantity in each of the following 3. Bruno can spend his income on two different goods: smoothies and energy bars. For each of the following three situations, decide if the given consumption bundle is within Bruno’s consumption possibilities. Then decide if it lies on the budget line or not. a) Smoothies cost $2 each, and energy bars cost $3 each. Bruno has income of $60. He is considering a consumption bundle containing 15 smoothies and 10 energy bars.b) Smoothies cost $2 each, and energy bars cost $5 each. Bruno has income of $110. He is considering a consumption bundle containing 20 smoothies and 10 energy bars. c) Smoothies cost $3 each, and energy bars cost $10 each. Bruno has income of $50. He is considering a consumption bundle containing 10 smoothies and 3 energy bars. 4. In each of the following situations, describe the substitution…

Suppose Lorenzo has a weekly budget of $48 to spend on ranch dressing and peanut butter. Ranch dressing is priced at $4 per bottle, and peanut butter is priced at $6 per jar. If Lorenzo spends his entire $48 on ranch dressing, he can buy jars of peanut butter. buy Use the blue line (circle symbol) to plot Lorenzo's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of ranch dressing and peanut butter that are affordable for Lorenzo. Finally, place the black point (plus symbol) on the point on Lorenzo's budget constraint that corresponds to a scenario in which Lorenzo spends $24 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 24 22 20 18 2 0 + 0 2 4 12 14 16 18 20 22 bottles of ranch dressing. If he spends his entire $48 on peanut butter, he can 6 8 RANCH DRESSING (Bottles) O True False BC, ($48) O Affordable Region $24 on Each What does the slope of…