Use the following data to work problems from a) to e) Income = 20$, price of cake is 4$, price of coffee is 2$ a) Calculate Amy's real income in terms of cake. b) Calculate the relative price of cake in terms of coffee. c) Calculate the equation for Amy's budget line (with coffee on the left side). d) If Amy's income increases to 35$ a week and the prices of coffee and cake remain unchanged, describe the change in her budget line. e) If the price of coffee doubles while the price of cake remains at 4$ a cup and Amy's income remains at 20$, describe the change in her budget line
Use the following data to work problems from a) to e) Income = 20$, price of cake is 4$, price of coffee is 2$ a) Calculate Amy's real income in terms of cake. b) Calculate the relative price of cake in terms of coffee. c) Calculate the equation for Amy's budget line (with coffee on the left side). d) If Amy's income increases to 35$ a week and the prices of coffee and cake remain unchanged, describe the change in her budget line. e) If the price of coffee doubles while the price of cake remains at 4$ a cup and Amy's income remains at 20$, describe the change in her budget line
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section6.A: Appendix: Indifference Curves And Utility Maximization
Problem 2AQ
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Use the following data to work problems from a) to e)
Income = 20$,
a) Calculate Amy's real income in terms of cake.
b) Calculate the relative price of cake in terms of coffee.
c) Calculate the equation for Amy's budget line (with coffee on the left side).
d) If Amy's income increases to 35$ a week and the prices of coffee and cake remain unchanged, describe the change in her budget line.
e) If the price of coffee doubles while the price of cake remains at 4$ a cup and Amy's income remains at 20$, describe the change in her budget line
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