Rummy has $40 a week to spend on burgerand cake.The price of burger is $5 and theprice of cake is $2 a slice1.if the price of cake doubles while the priceof burger remains at $5 and rummys incomeremains at $40 describe the change in hisbudget line

It is given that the consumer prefers burger (B) and cake (C). The price of B and C are equal to $5…

Answered: Rummy has $40 a week to spend on burger…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Measuring The Cost Of Living

Section: Chapter Questions

Problem 2PA

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1. 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. a. Calculate Rummy's real income in terms of cake. b. Calculate the relative price of cake in terms of burger. 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. e. 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. f. If Rummy's income is $20 and all the money spend to purchase burger, how many burger he can purchase? 2. Consider Competitive Market where Jamil is selling flowers. If Market Price is $50 answer the following FC Flowers 6 TC 445 485 300 7 8 9 530 580 10 11 635 695 Questions: i. How many flowers should he sell? ii. Calculate Jamil's Profit or Loss. iii. Find the Price at which he will shut down in the short run. iv. Find the Price at…
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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 1.if the price of cake doubles while the price of burger remains at $5 and rummys income remains at $40 describe the change in his budget line