Assignment1. Rummy has $40 a week to spend on burger and cake. The price of burger is $5 and theprice of cake is $2 a slice.Calculate Rummy's real income in terms of cake.b. Calculate the relative price of cake in terms of burger.c. Calculate the equation for Amy's budget line.d. If Rummy's income increases to $60 a week and the price of burger and cake remainunchanged describe the change of his budget line.If the price of cake doubles while the price of burger remains at $5 and Rummy'sincome remains at $40 describe the change in his budget line.a.e.f. If Rummy's income is $20 and all the money spend to purchase burger, how many burgerhe can purchase?

Question
Asked Feb 13, 2020
195 views
Assignment
1. Rummy has $40 a week to spend on burger and cake. The price of burger is $5 and the
price of cake is $2 a slice.
Calculate Rummy's real income in terms of cake.
b. Calculate the relative price of cake in terms of burger.
c. Calculate the equation for Amy's budget line.
d. If Rummy's income increases to $60 a week and the price of burger and cake remain
unchanged describe the change of his budget line.
If the price of cake doubles while the price of burger remains at $5 and Rummy's
income remains at $40 describe the change in his budget line.
a.
e.
f. If Rummy's income is $20 and all the money spend to purchase burger, how many burger
he can purchase?
help_outline

Image Transcriptionclose

Assignment 1. Rummy has $40 a week to spend on burger and cake. The price of burger is $5 and the price of cake is $2 a slice. Calculate Rummy's real income in terms of cake. b. Calculate the relative price of cake in terms of burger. c. Calculate the equation for Amy's budget line. d. If Rummy's income increases to $60 a week and the price of burger and cake remain unchanged describe the change of his budget line. If the price of cake doubles while the price of burger remains at $5 and Rummy's income remains at $40 describe the change in his budget line. a. e. f. If Rummy's income is $20 and all the money spend to purchase burger, how many burger he can purchase?

fullscreen
check_circle

Expert Answer

Step 1

Hey, since there are multiple subpart questions posted, we will answer first three subpart question. 

Step 2

a.

Rummy ‘s real income in terms of cake can be calculated as follows:

Economics homework question answer, step 2, image 1

Thus, the real income in terms of cake is $20

Step 3

b.

Relative price of cake in terms of burger can be calculated as follows:

Economics homework question answer, step 3, image 1

Thus, the relative price of cake in terms of burger is 0.4.

...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.

Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Back to Assignment Attempts:     1.5             Do No Harm:    1.5 / 2   8. Shifts in sup...

A: The statement issued by the Surgeon General on the consumption of peanut butter leads to shifts in t...

question_answer

Q: 5. Supply: Basic concepts Complete the following table by selecting the term that matches each defin...

A: Supply Schedule: It is the table showing the relationship between the price of a good and the amount...

question_answer

Q: Imagine an economy with two countries, US and China, which can produce 2 goods, cars and trucks. Use...

A: The absolute advantage is the advantage that an economy has over the other economy in producing a co...

question_answer

Q: Which ONE of the following descriptions is CORRECT according to this Normal Form?

A: Click to see the answer

question_answer

Q: 11. Disequilibrium Suppose the market for hamburgers is unregulated. That is, hamburger prices a...

A: Shortage:   The shortage is the situation occurs when the quantity of demand available is greater th...

question_answer

Q: Back to Assignment Attempts:                   Do No Harm:    / 1   10. Market equilibrium...

A: According to the law of demand and supply, the demand for a product will decline with increasing pro...

question_answer

Q: The dealer increase price of TV by 5 percent then quantity increase by 10 percent. find the elastici...

A: Given values; The percentage change in price = 5 percent. The percentage change in quantity = 10 per...

question_answer

Q: 2. Liquidity Consider the relative liquidity of the following assets: Assets 1. A $5 bill 2. A share...

A: Click to see the answer

question_answer

Q: Two firms compete against each other. Currently Firm 1 earns $10 million per year and Firm 2 earns $...

A: According to the problem, the sequence will be: Profits when no changes are made – Firm 1: $10M, Fir...