Principles of Microeconomics

7th Edition

ISBN: 9781305156050

Author: N. Gregory Mankiw

Publisher: Cengage Learning

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Explain why individuals make Choices that are directly on the budget constraint, rather than inside the budget constraint DI outside it.

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As a college student you work at a part-time job, but your parents also send you a monthly allowance. Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?

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Draw Maries budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of me budget constraint?

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I already have parts 1,2,3. I just need help with parts 4 and 5.
Robinson Crusoe lives in an island. There are onlytwo food sources in this island: coconut and berries. There is no money in the island but Robinsonuses his time to collect coconuts and berries. He sleeps 8 hours in a day. Collecting a coconut takes2 hours. Picking a pound of berries takes one hour.
1. Considering the food collection times as the prices in the island, write the budget line equationand draw Robinson’s budget line graphically. Specify the intercepts and the slope in the budgetline on the graph.Robinson falls from coconut tree and injures his leg. After the injury collecting coconut takes longer.He can only collect a coconut in 4 hours, but he can still pick berries at the same pace as before.
2. What happens to Robinson’s budget line? Show on the graph.
Robinson’s injury makes him more sleepy. Now he sleeps 12 hours in a day.
3. What happens to Robinson’s budget line? Show on the graph.Two weeks after the…

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3. Darnell's $30 budget is spent entirely on muffins, which cost $3 each, or orange juice. His budget constraint shows endpoints at 10 muffins or 20 cartons of orange juice. How much does orange juice cost? (Sketch out the budget constraint to help you with this one, but I'm only looking for a verbal answer.)

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Bob goes to the supermarket to buy milk and cereal. He has $20 tospend. A consumption bundle consists of a quantity of milk, x (liters),and a quantity of cereal, y (grams). For all of the following questionsyou can assume that the consumption set is R2+. This means that milkand cereal can be consumed in any non-negative quantity.
(a) The price of milk at the supermarket is px = 4$/liter. The priceof cereal is 0.2cents/gram. Draw Bob's budget set. What is theslope of the budget line?
(b) Bob notices that the supermarket has a special coupon. A couponstates: "Buy 1 liter of milk and get 1 box of cereal for free". A boxof cereal has 2000 grams of cereal in it. Each shopper is limitedto one coupon. Draw Bob's budget set with 1 coupon. (Hint: Becareful with units again).
(c) Due to popular demand, the supermarket extends its special offer. Each customer is now allowed to use 2 coupons. Draw Bob's budget set with 2 coupons.

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Marie has a weekly budget of $24, which she likes to spend on magazines and pies. Calculate:
a) If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week?
b) If the price of a pie is $12, what is the maximum number of pies she could buy in a week?
c) Draw Marie’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint?
d) What is Marie’s opportunity cost of purchasing a pie?
NOTE: To answer this question simply work your answer in a piece of paper, take a photo of it and upload the file. Remember that this is a problem solving question, hence you must show your work!

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Gowri has $6 per day to purchase lunch. She spends all of her lunch money on pizza and iced-tea. The price of pizza is $2.00 per slice and iced-tea costs $1 per bottle.
Economics
a. Draw Gowri's budget constraint and label it BC0. Put pizza on the horizontal axis and iced-tea on the vertical axis. Be sure to identify the intercept values.
b. If the price of iced-tea rises to $1.20 per bottle, show what will happen to her budget constraint in your diagram. Be sure to indicate any new intercept values.

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Assume that Sara has $800 per month to divide between playing golf and playing paint ball . Assume Golf costs $40 and paintball costs $80 . Suppose Sara plays golf eight times per month and plays paintball six times per month .
a. Draw Sara’s budget constraintb. Assume Sara has new expenses and can spend $320 only this month. Draw the new budget constraintc. As a result of a decrease in income Sara decides to play 11 rounds of golf and two games of paintball . what kind of a good is paintball ? what kind of a good is golf?d. Assume Sara has $400, the price of paintball is still $40 , but the price of Golf doubles , draw the new budget constraint

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Draw an individual choice diagram for a person choosing between buying apples or bananas with a budget constraint. Be sure to label the curves and optimizing solution set of Qb and Qa. Explain why individuals make choices that are directly on the budget constraint, rather than inside the budget constraint or outside it.

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Robinson Crusoe lives in an island. There are onlytwo food sources in this island: coconut and berries. There is no money in the island but Robinsonuses his time to collect coconuts and berries. He sleeps 8 hours in a day. Collecting a coconut takes2 hours. Picking a pound of berries takes one hour.
1. Considering the food collection times as the prices in the island, write the budget line equationand draw Robinson’s budget line graphically. Specify the intercepts and the slope in the budgetline on the graph.Robinson falls from coconut tree and injures his leg. After the injury collecting coconut takes longer.He can only collect a coconut in 4 hours, but he can still pick berries at the same pace as before.
2. What happens to Robinson’s budget line? Show on the graph.
Robinson’s injury makes him more sleepy. Now he sleeps 12 hours in a day.
3. What happens to Robinson’s budget line? Show on the graph.Two weeks after the injury, Robinson’s leg is slightly better, and he sleeps 8 hours…

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A student has a monthly budget of $120 to spend on eitherburritos, which cost $6 each, or sodas, which cost $4 each.1. What is the largest number of burritos that the studentcould afford to purchase in one month?2. What is the largest number of sodas the student couldafford to purchase in one month?3. Draw the student's budget constraint. Put burritos on thex-axis and sodas on the y-axis.Graded Assignment due Monday4. Which combinations of burritos and sodas are unaffordable--those tothe left of the line in the graph or those above the line in the graph? Why?5. Which combinations would leave some budget unspent - those to theleft of the line in the above graph or those to the right of the line in theabove graph?6. What is the equation for the student's budget constraint? In yourequation, use Q1 as the variable to represent the quantity of burritos andQ2 to represent the quantity of sodas.7. What is the opportunity cost of a burrito?8. What is the opportunity cost of a soda?9. The local…

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