Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 9, Problem 14APA
To determine
M’s budget line.
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Students have asked these similar questions
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
The graph shows the budget line for a consumer who only
buys cookies and magazines. If the consumer's income is $20, what is the price of a cookie?
Cookies (number per week)
24
20
16
8
0
2
4
6
8 10 12
Magazines (number per week)
What does the point on a budget line indicate in terms of prices?
Chapter 9 Solutions
Macroeconomics
Ch. 9.1 - Prob. 1RQCh. 9.1 - Prob. 2RQCh. 9.1 - Prob. 3RQCh. 9.1 - Prob. 4RQCh. 9.1 - Prob. 5RQCh. 9.2 - Prob. 1RQCh. 9.2 - Prob. 2RQCh. 9.2 - Prob. 3RQCh. 9.2 - Prob. 4RQCh. 9.3 - Prob. 1RQ
Ch. 9.3 - Prob. 2RQCh. 9.3 - Prob. 3RQCh. 9.3 - Prob. 4RQCh. 9.3 - Prob. 5RQCh. 9 - Prob. 1SPACh. 9 - Prob. 2SPACh. 9 - Prob. 3SPACh. 9 - Prob. 4SPACh. 9 - Prob. 5SPACh. 9 - Prob. 6SPACh. 9 - Prob. 7SPACh. 9 - Prob. 8SPACh. 9 - Prob. 9SPACh. 9 - Prob. 10SPACh. 9 - Prob. 11SPACh. 9 - Prob. 12APACh. 9 - Prob. 13APACh. 9 - Prob. 14APACh. 9 - Prob. 15APACh. 9 - Prob. 16APACh. 9 - Prob. 17APACh. 9 - Prob. 18APACh. 9 - Prob. 19APACh. 9 - Prob. 20APACh. 9 - Prob. 21APACh. 9 - Prob. 22APACh. 9 - Prob. 23APACh. 9 - Prob. 24APACh. 9 - Prob. 25APACh. 9 - Prob. 26APACh. 9 - Prob. 27APACh. 9 - Prob. 28APACh. 9 - Prob. 29APACh. 9 - Prob. 30APA
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- Jamani earns a weekly income of $6000. Suppose he wishes to spend this income on two goods, games and DVDs only. A game costs $200 while a DVDcosts $600. Draw Jamani’s budget line. Putting games on the Y axis. ii. Suppose his income increases to $9000 per week, illustrate what happens to her budget line.iii. Suppose the price of games increase to $600, while his income and the price of DVDs is unchanged from part (i).arrow_forwardSuppose Carlos has a budget of $100 to spend on soft drinks and bottled water. Soft drinks cost $2 per liter. Bottled water costs $1 per liter. Draw Carlos's budget line in the graph.arrow_forwardBrenda wants to buy new car and has a budget of $25,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 1 to 10, with 10 representing either the most styling or best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $6,250. She also observed that as the gas-mileage index rises by one unit, the price of the car increases by $5,000. Illustrate the various combinations of style (S) and gas mileage (G) that Brenda could select with her $25,000 budget. Using the line drawing tool, illustrate Brenda's budget line. Label this line 'Budget Line'. Carefully follow the instructions above, and only draw the required object. Suppose Brenda's preferences are such that she always receives two times as much satisfaction from an extra unit of styling as she does from gas mileage. What type of car will Brenda choose?…arrow_forward
- Hafidh’s income is $200 a month. The price of watch is $25 a show, and the price of a Jeans is $15. Calculate the equation for Hafidh’s budget line Draw a graph of Hafidh’s budget line with the quantity of Watches on the x-axis. If Hafidh’s income increased from $200 to 350$. Explain and show how Hafidh’s budget line changes with watches on the x-axis.arrow_forwardAmy has $12 to spend on coffee and soda. The price of coffee is $2 a cup, and soda is $1 a can. The graph below shows her budget line. 1. Can Amy buy 7 cans of soda and 2 cups of coffee a week? 2. Can she buy 7 cups of coffee and 2 cans of soda a week? 3.What happens to the new budget line if the price of soda increases to $3 a can.arrow_forwardHow does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?arrow_forward
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