Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. (a) Assuming that Yoghurt and Bread are compliments for Akua, construct the equation for Akua’s Budget Line for her to consume all her income of GHS 400. (b) What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes

Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. (a) Assuming that Yoghurt and Bread are compliments for Akua, construct the equation for Akua’s Budget Line for her to consume all her income of GHS 400. (b) What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 10P

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Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. a. Given this information, construct the equation for Akua’s Budget Line. c. Akua gets a research grant and her income increases to GHS 800 per month. What is the new equation of her budget line? What if income stays constant at GHS 400 and the price of Yoghurts increase to GHS10? d. Assume that prices are the same as used in part a. If the marginal utility of a Yoghurt is 20, what is the marginal utility of Bread if she is maximizing her utility? e. Now assume that Yoghurt and Bread are compliments for Akua. For her to consume all her income of GHS 400, and the prices used in part a. What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes?
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need quality answer Nuoya has $256 to spend on cherry and/or coconuts. The price of cherry is $12/kg and the price of coconuts is $17/kg. What is the slope of her budget line, if cherry is on the horizontal axis and coconuts are on the vertical axis? Round your answer to two decimal places, if necessary. Hint: is slope positive or negative?
Akua gets a research grant and her income increases to GHS 800 per month. What is the new equation of her budget line? What if income stays constant at GHS 400 and the price of Yoghurts increase to GHS10?
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