32 24 16 4 8 12 16 20 24 Coffee (pounds per week) OA. A decline in his preferences for both gasoline and coffee. B. An equal percentage reduction in the prices of both a gallon of gasoline and a pound of coffee. OC. An increase in Sam's income. D. A fall in the ratio of the price of a gallon of gasoline to the price of a pound of coffee. E. A simultaneous doubling of the price of a gallon of gasoline and doubling of the price of a pound of coffee. Gasoline (gallons per week)

32 24 16 4 8 12 16 20 24 Coffee (pounds per week) OA. A decline in his preferences for both gasoline and coffee. B. An equal percentage reduction in the prices of both a gallon of gasoline and a pound of coffee. OC. An increase in Sam's income. D. A fall in the ratio of the price of a gallon of gasoline to the price of a pound of coffee. E. A simultaneous doubling of the price of a gallon of gasoline and doubling of the price of a pound of coffee. Gasoline (gallons per week)

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section21.1: The Budget Constraint: What The Consumer Can Afford

Problem 1QQ

See similar textbooks

Similar questions

Ravi has £21 to spend on pastries and biscuits. If he spends all the money on pastries, he can afford 15 pastries. The slope of Ravi’s budget line (assuming his pastries consumption is measured on the horizontal axis and his biscuits consumption is measured on the vertical axis) is -3.5 (3.5 in absolute terms). Calculate the price of a pastry and the price of a biscuit. Write down Ravi’s budget equation and draw the corresponding budget line. Mark the consumption bundle mentioned above. In your graph, clearly label the axes, the budget line, and calculate the coordinates of the points of intersection of the budget line with each axis. Interpret each of those points. Discuss how Ravi’s budget set would change if his budget doubles. Show the relevant changes graphically. How could the price of a pastry increase so that Ravi could still afford to buy 15 pastries? Discuss how Ravi’s budget constraint would change if the government imposed a tax of £0.50 per pastry and £0.50 per biscuit.
What is a budget line slope called
Suppose 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.
(Figure and Table: The Budget Line) Use Figure and Table: The Budget Line. A(n) _____ in the price of potatoes would rotate the budget line, changing the intercept on the _____ axis and moving it _____ the origin. Select one: a. decrease; vertical; away from b. increase; horizontal; away from c. increase; vertical; away from d. decrease; horizontal; toward
A consumer has $200 to divide between purchasing wine and quiche. Suppose wine costs $20 per bottle if the consumer purchases up to 5 bottles. After that, it is $10 per bottle. Suppose quiche is $10 each. Please draw the budget line. Will a consumer purchase exact 5 bottles of wine? And why? (Explain it using both the graph and words)
Suppose that a consumer has an income of $10 per period, and that he must spend it all on meat or potatoes. If meat is $2.00 per pound and potatoes are $2.00 per pound, draw the consumer's budget line on a graph. identify the quantity of meat and potatoes that would be consumed.
Plot each of the bundles from parts A – C on a graph that measures avocadoes on the horizontal axis and loaves of bread on the vertical axis, connect the dots to find Matt’s budget constraint. Show what happens to the budget constraint if his income falls to $100, (prices do not change). Show what happens to the budget constraint if price of avocado rises to Pa = $2 per avocado, (income and price of loaves of bread did not change).
please urgent EXERCISE 2 Ravi has £21 to spend on pastries and biscuits. If he spends all the money on pastries, he can afford 15 pastries. The slope of Ravi’s budget line (assuming his pastries consumption is measured on the horizontal axis and his biscuits consumption is measured on the vertical axis) is -3.5 (3.5 in absolute terms). a) Calculate the price of a pastry and the price of a biscuit. Write down Ravi’s budget equation and draw the corresponding budget line. Mark the consumption bundle mentioned above. In your graph, clearly label the axes, the budget line, and calculate the coordinates of the points of intersection of the budget line with each axis. Interpret each of those points. b) Discuss how Ravi’s budget set would change if his budget doubles. Show the relevant changes graphically. How could the price of a pastry increase so that Ravi could still afford to buy 15 pastries? c) Discuss how Ravi’s budget constraint would change if the government imposed a tax of £0.50…
Raymond consumes meatloaves and pineapples. He has decided that hismonthly budget will be $1500. Suppose that one meatloaf costs $375, while one pineapple costs $150. Suppose Raymond decides to cut his monthly budget in half. Coincidentally, the next time he shops, he learns that meatloaves and pineapples are on sale for half price. Show what happens to Raymond’s budget line?
Suppose Raymond decides to cut his monthly budget in half. Coincidentally, the next time he shops, he learns that meatloaves and pineapples are on sale for half price. Show what happens to Raymond’s budget line?
Theodore's budget line has changed from A to B. Which of the following explains the change in Theodore's budget line? A) The price of food increased, and the price of clothing decreased. B) The price of food and the price of clothing increased. C The price of food and the price of clothing decreased. D) The price of food decreased, and the price of clothing increased. E) none of the above
Anthony’s Budget Line Anthony has already committed most of his income to his monthly living expenses and saving a few dollars each month. Having made these decisions, Anthony has a remaining budget of $15 a week, which he spends on two goods: coffee and magazines. The price of a cup of coffee is $2.50 and the price of a magazine is $5. 1. Construct a table showing the alternative combinations of the two goods that Anthony might purchase in a given week. 2. Use the data in your table to graph Anthony’s budget line. 3. What is the opportunity cost of each cup of coffee? What is the opportunity cost of each magazine? 4. Based on this information, do we know how many cups of coffee or magazines Anthony should buy each week? Why or why not? 5. Anthony decides he wants to upgrades to the $5 cup of coffee- the larger cup with extra flavoring! Using a graph, show how this will change Anthony’s budget line. (Note: This is most easily demonstrated by putting both budget lines on the…