Amy has $24.00 a week to spend on coffee andQuantity (cups of coffee per week)pop.24-The price of a cup of coffee is $2.00 and the price of a can of pop is $1.00.20-Draw and label Amy's budget line.16-Amy can afford to buy 12 cans of pop and 4 cups of coffee.12-A. True8-B. FalseAmy can afford to buy 16 cans of pop and 6 cups of coffee.4-A. TrueB. False4812162024Quantity (cans of pop per week)The relative price of a cup of coffee is>>> Draw only the objects specified in the question.

Budget line: - it is the graphical representation of different combinations of two goods that a…

Amy has $24.00 a week to spend on coffee and Quantity (cups of coffee per week) рop. 24- The price of a cup of coffee is $2.00 and the price of a can of pop is $1.00. 20- Draw and label Amy's budget line. 16- Amy can afford to buy 12 cans of pop and 4 cups of coffee. 12- O A. True 8- O B. False Amy can afford to buy 16 cans of pop and 6 cups of coffee. 4- O A. True O B. False 20 Quantity (cans of pop per week) 12 16 24 The relative price of a cup of coffee is >>> Draw only the objects specified in the question.

Amy has $24.00 a week to spend on coffee and Quantity (cups of coffee per week) рop. 24- The price of a cup of coffee is $2.00 and the price of a can of pop is $1.00. 20- Draw and label Amy's budget line. 16- Amy can afford to buy 12 cans of pop and 4 cups of coffee. 12- O A. True 8- O B. False Amy can afford to buy 16 cans of pop and 6 cups of coffee. 4- O A. True O B. False 20 Quantity (cans of pop per week) 12 16 24 The relative price of a cup of coffee is >>> Draw only the objects specified in the question.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. David gets $3 per week as an allowance to spend any way he pleases. Since he likes only peanut butter and jelly sandwiches, he spends the entire amount on peanut butter (at $0.05 per ounce) and jelly (at $0.1 per ounce). Bread is provided free of charge by a concerned neighbor. David is a picky eater and makes his sandwiches with exactly 1 ounce of jelly and 2 ounces of peanut butter. He is set in his ways and will never change these proportions. a) How much peanut and jelly will David buy with his $3 allowance per week? b) Suppose the price of jelly increases to $0.15 per ounce. How much of each commodity would be bought? c) By how much should David’s allowance be increased to compensate for the rise in the price of jelly in part b? d) Graph your results of part a through part c. 1 e) In what sense does this problem involve only a single commodity? Graph the demand curve for this single commodity. f) Discuss the results of this problem in terms of the income and substitution…
For this problem, assume that Joe has $80 to spend on books and movies each month and that both goods must be purchased whole (no fractional units). Movies cost $8 each, and books cost $20 each. Joe’s preferences for movies and books are summarized by the following information: MOVIES BOOKS NO. PER MONTH TU MU MU/S NO. PER MONTH TU MU MU/S 1 50 — — 1 22 — — 2 80 — — 2 42 — — 3 100 — — 3 52 — — 4 110 — — 4 57 — — 5 116 — — 5 60 — — 6 121 — — 6 62 — — 7 123 — — 7 63 — — a. Fill in the figures for marginal utility and marginal utility per dollar for both movies and books. b. Are these preferences consistent with the law of diminishing marginal utility? Explain briefly. c. Given the budget of $80, what quantity of books and what quantity of movies will maximize Joe’s level of satisfaction? Explain briefly. d. Draw the budget…
1. What is the slope of the consumer’s budget line? Interpret economically.2. Graph the budget line showing all the different combinations of good ? (drawn on the horizontal axis) and good ? (drawn on the vertical axis) that can be bought given the consumer’s total income. In the graph, indicate the y-intercept and x-intercept of the budget line.
1. Suppose you earn $1500 per week and you consume only two types of goods per week- sandwiches and orange juice, which you purchase at a mini mart. Each sandwich cost $150 and an orange juice is $75 per cup. Answer: a) Suppose your income increase from $1500 per week to $3000 per week. Construct a new table showing alternative combinations of sandwiches and cups of orange juice. Construct the new budget line. Why would this budget line be preferred to the old one with an income of $1500?
12)Suppose a consumer has $100 to spend on two goods, shoes and shirts. If the price of a pair of shoes is $20 per pair and the price of a shirt is $15 each, which of the following combinations is unaffordable to the consumer? A) 0 pairs of shoes and 0 shirts B) 2 pairs of shoes and 4 shirts C) 5 pairs of shoes and 0 shirts D) 0 pairs of shoes and 7 shirts E) 2 pairs of shoes and 3 shirts
John Q. Public spends all of his income on gasoline and hot dogs. Draw his budget line under several conditions: a. His income is $100, and one gallon of gasoline and one hot dog each cost $2. b. His income is $150, and the two prices remain the same. c. His income is $100, hot dogs cost $2 each, and gasoline costs $2.50 per gallon.
Jeremy has a monthly income of $60. He spends his money making telephone calls (good ?, measured in minutes) at a price of ?? and on other composite good ?, whose price has been normalized to one, meaning ?? = $1. His mobile phone company offers him two plans: plan A, in which he pays no monthly fee and makes calls for $0.50 per minute, or plan B, in which he pays a $20 monthly fee and benefits from cheaper phone calls at $0.20 per minute.(a) Depict Jeremy’s budget constraint under each of the two plans, with the number of phone calls (good ?) in the horizontal axis and the composite good (good ?) in the vertical axis. (b) If Jeremy mentioned that plan A is better for him, what is the set of consumption bundles he may purchase if his behavior is consistent with WARP?
3) Joshua is a utility maximizer and likes ice cream. He likes vanilla ice cream, but wouldhappily switch to chocolate ice cream if offered 1 scoop of chocolate ice cream for everyscoop of vanilla ice cream he has to give up. He has $5 of income to spend on ice cream.If vanilla ice cream costs $1 per scoop and chocolate ice cream costs $2.5 per scoop,Joshua will consume ______ scoops of chocolate and ______ scoops of vanilla ice creamper day.A) 0; 5B) 5; 0C) 2; 0D) 0; 2E) None of the above.
Assume that John has RO 21 to spend on Energy drink and Protein bars each month and that both goods must be purchased whole (no fractional units). Energy drink (X) cost RO 3 and Protein bars (Y) cost RO 2 each. John’s preferences for movies and books are summarized by the following information: No. per Month Energy drink No. per Month Protein bars TU MU MU/Px TU MU MU/Py 1 84 1 36 2 156 2 66 3 216 3 90 4 264 4 108 5 300 5 120 6 324 6 126 7 336 7 126 Fill in the figures for marginal utility of X and marginal utility of Y per dollar for both movies and books. Are these preferences consistent with the law of diminishing marginal utility? Explain briefly. Given the budget of RO 21, what quantity of Energy drink (X) and what quantity of Protein bars (Y) will maximize John’s…
11) Suppose there are two goods, X and Y, with X measured on the horizontal axis and Y measured onthe vertical axis. Which of the following statements about a budget line relating the two goods is correct? The budget line shows all the possible combinations of X and Y a consumer can buy given the level of income and prices. The budget line shows all the possible combinations of X and Y a consumer can buy given the level of income, prices, and borrowings. The budget line shows the most preferred combinations of X and Y a consumer can buy given the level of income and prices. The budget line shows the least-cost combinations of X and Y a consumer will buy given the level of income and prices.
Camille is at the candy store with Grandma Mary, who offers to buy her $10 worth of candy. If lollipops are $1 each and candy bars are $2 each, what combination of candy can Camille's Grandma Mary buy her? ten lollipops and five candy bars four lollipops and three candy bars three lollipops and four candy bars two lollipop and five candy bars
Jane is your typical economics student who consumes two goods: economics textbook and coffee. Jane’s income is $40. She can spend it all on books and get 5 or she can spend it all on coffee and get 20 cups.Given this information, construct the equation for Jane’s budget line and plot it (put books on the x–axis and coffee on the y–axis) The following are bundles that Jane can afford with her income (as shown in Table 3.1):Table 3.1BooksCoffee 1- -0 -8 2- Fill in the blanks in the table with quantities that can exhaust Jane’s income. Assume that prices are the same as used in part (a). If marginal utility of a book is 20, what is the marginal utility of coffee if she is maximizing utility?