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We use a Budget Constraint model to interpret and analyze the economizing problem for an individual. Lydia is a consumer who has a $10 budget for fruit. She buys peaches and oranges. The nominal price of a peach is $1 and the nominal price of an orange is $2. Please use paper to graph and answer/calculate the following questions. 1. Graph her Budget line 2. The slope of the budget line is: 3. Lydia's opportunity cost of a peach is: 4. Lydia's opportunity cost of an orange is: 5. Suppose the price of a peach increases to $1.50 per peach, and the price of an orange stays the same, as does the budget. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 6. Now suppose the price of a peach and the budget is the same as at the initial level and the price of an orange has decreased to $1.50. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 7. Now suppose that prices of both peach and orange are the same as at initial level but her budget has increased to $12. a. Lydia's new opportunity cost of a peach is: b. New slope of the budget line is: 8. On another page, graph your answers to #5, #6, & #7

We use a Budget Constraint model to interpret and analyze the economizing problem for an individual. Lydia is a consumer who has a $10 budget for fruit. She buys peaches and oranges. The nominal price of a peach is $1 and the nominal price of an orange is $2. Please use paper to graph and answer/calculate the following questions. 1. Graph her Budget line 2. The slope of the budget line is: 3. Lydia's opportunity cost of a peach is: 4. Lydia's opportunity cost of an orange is: 5. Suppose the price of a peach increases to $1.50 per peach, and the price of an orange stays the same, as does the budget. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 6. Now suppose the price of a peach and the budget is the same as at the initial level and the price of an orange has decreased to $1.50. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 7. Now suppose that prices of both peach and orange are the same as at initial level but her budget has increased to $12. a. Lydia's new opportunity cost of a peach is: b. New slope of the budget line is: 8. On another page, graph your answers to #5, #6, & #7

Micro Economics For Today
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 3SQP
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I only need help with #5,#6,#7,#8

We use a Budget Constraint model to interpret and analyze the economizing problem for an individual. Lydia is a consumer who has a $10 budget for fruit. She buys peaches and oranges. The nominal price of a peach is $1 and the nominal price of an orange is $2. Please use paper to graph and answer/calculate the following questions. 1. Graph her Budget line 2. The slope of the budget line is: 3. Lydia's opportunity cost of a peach is: 4. Lydia's opportunity cost of an orange is: 5. Suppose the price of a peach increases to $1.50 per peach, and the price of an orange stays the same, as does the budget. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 6. Now suppose the price of a peach and the budget is the same as at the initial level and the price of an orange has decreased to $1.50. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 7. Now suppose that prices of both peach and orange are the same as at initial level but her budget has increased to $12. a. Lydia's new opportunity cost of a peach is: b. New slope of the budget line is: 8. On another page, graph your answers to #5, #6, & #7
Transcribed Image Text:We use a Budget Constraint model to interpret and analyze the economizing problem for an individual. Lydia is a consumer who has a $10 budget for fruit. She buys peaches and oranges. The nominal price of a peach is $1 and the nominal price of an orange is $2. Please use paper to graph and answer/calculate the following questions. 1. Graph her Budget line 2. The slope of the budget line is: 3. Lydia's opportunity cost of a peach is: 4. Lydia's opportunity cost of an orange is: 5. Suppose the price of a peach increases to $1.50 per peach, and the price of an orange stays the same, as does the budget. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 6. Now suppose the price of a peach and the budget is the same as at the initial level and the price of an orange has decreased to $1.50. a. Lydia's new opportunity cost of an orange is: b. The new slope of the budget line is: 7. Now suppose that prices of both peach and orange are the same as at initial level but her budget has increased to $12. a. Lydia's new opportunity cost of a peach is: b. New slope of the budget line is: 8. On another page, graph your answers to #5, #6, & #7
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