As described in Exercise 8.1, Lucy wants carpets and paintings for here office. Her company has given her a budget of $7200 for this purpose. Persian carpets of the size that she wants can be purchased for $900 each and paintings from a local Native American artist cost $400 each. Using Excel's charting tool, draw Lucy's budget constraint if her budget is $5000. Use 0, 1, 2, 3, and 5 carpets as possible quantities. Put carpets on the horizontal axis and paintings on the vertical axis
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| As described in Exercise 8.1, Lucy wants carpets and paintings for here office. Her company has given her a budget of $7200 for this purpose. Persian carpets of the size that she wants can be purchased for $900 each and paintings from a local Native American artist cost $400 each. |
| Using Excel's charting tool, draw Lucy's budget constraint if her budget is $5000. Use 0, 1, 2, 3, and 5 carpets as possible quantities. Put carpets on the horizontal axis and paintings on the vertical axis. |
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- A student has a monthly budget of $120 to spend on either burritos, which cost $6 each, orsodas, which cost $4 each.What is the largest number of burritos that the student could afford to purchase in onemonth?What is the largest number of sodas the student could afford to purchase in one month? Draw the student's budget constraint. Put burritos on the x-axis and sodas on the y-axis.Kimiko is planning a party to celebrate her birthday. She has decided to serve sushi and yakitori meat skewers. Each serving of sushi is $8 and each yakitori skewer is $2. Kimiko has $240 to spend on the party, and her budget line is shown below. Her friend Barry thinks there will not be enough food, so he gives Kimiko $80 more to spend on the party (she now has $320). Show Kimiko\'s new budget line in the graph below and answer the question.Describe in detail, explaining detail, and provide a matching drawing of your own budget constraint.
- Maria spends all of her income of $2,000 on food (F) and clothing (C). The prices per unit are: PF = $5 and PC = $20. (a) The maximum amount of food that Maria can consume is _____. (b) The maximum number of pieces of clothing that Maria can consume is ____. (c) Therefore the intercepts of Maria’s budget line are _____ F and _____ C. (d) Graph Maria’s budget line, with F on the vertical axis and C on the horizontal axis. (e) Maria (can, cannot) __________ afford to buy a combination of 200 F and 60 C because this combination of goods is located (outside, inside, on) __________ her budget line. (f) The slope of this budget line is _________. (g) The opportunity cost of one piece of clothing is ___ units of food. h) If Maria’s income rises to $3,000, the new intercepts of her budget line are _____ F and _____ C. (i) Graph this new budget line on your graph for item (d) above.Maria spends all of her income of $2,000 on food (F) and clothing (C). The prices per unit are: PF = $5 and PC = $20. (a) The maximum amount of food that Maria can consume is _____. (b) The maximum number of pieces of clothing that Maria can consume is ____. (c) Therefore the intercepts of Maria’s budget line are _____ F and _____ C. (d) Graph Maria’s budget line, with F on the vertical axis and C on the horizontal axis. (e) Maria (can, cannot) __________ afford to buy a combination of 200 F and 60 C because this combination of goods is located (outside, inside, on) __________ her budget line. (f) The slope of this budget line is _________. (g) The opportunity cost of one piece of clothing is ___ units of food. h) If Maria’s income rises to $3,000, the new intercepts of her budget line are _____ F and _____ C. (i) Graph this new budget line on your graph for item (d) above. Question 2 Use the diagram below to answer the questions that follow. (a) What change could cause the…Marie has a weekly budget of $2400, which she likes to spend on magazines and pies. If the price of one magazine is $40, what is the maximum number of magazines she can buy in a week? If the price of a pie is $120, what is the maximum number of pies she can buy in a week? Compute and show Marie’s budget schedule for pies and magazines. Draw Marie’s budget line with pies on the horizontal axis and magazines on the vertical axis.
- Use the following information to answer questions 1 through 8: A student has a monthly budget of $120 to spend on either burritos, which cost $6 each, or sodas, which cost $4 each. What is the largest number of burritos that the student could afford to purchase in one month? What is the largest number of sodas the student could afford to purchase in one month?A student has a monthly budget of $120 to spend on either burrito, which cost $6 each, or sodas, which cost $4 each.Draw the student's budget constraint. Put burritos on the x-axis and sodas on the y-axis. Which combinations of burritos and sodas are unaffordable--those to the left of the line in the graph or those above the line in the graph? Why? Which combinations would leave some budget unspent - those to the left of the line in the above graph or those to the right of the line in the above graph?Louis is trying to decide what combination of cups and plates to buy. His budget is $12. Plates cost $4 each and cups cost $2 each. The numbers in the table represent total utility. Given his budget, which combination will maximize total utility? number of plates and cups.
- You have the Cobb-Douglas utility function u(x,y) = xy over apples (x) and plums (y) and you have $120 budget to spend and can carry at most 480 ounces in weight in your backpack going back to the dorm. Each apple costs $1 and weighs 8 ounces, and each plum costs $3 and weighs 4 ounces. You can only leave the store with a bundle of fruits you can afford and carry. (a) Drawing the relevant lines, intercepts, marking the points and hence identifying the feasible set of bundles, calculate the optimal bundle. (b) Forget about (a). If you were to choose a backpack before going on this shopping trip, for the weight constraint not to be an issue for you, how many ounces of weight capacity would you need for your backpack? HINT: That is, for this weight capacity of the backpack, you’d be able to carry the best bundle you can afford, i.e, the weight constraint is not binding for your decision. ( c) Forget about (b). In (a), just before going out for shopping with your backpack to buy the…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…If the price of a slice of cake is $4, the price of a slice of pie is $2, and Latasha spends her entire budget of $10, she will choose to buy of pie and of cake.
