Sean budgets $30 per week for transportation. To get around, he can either drive his car (D) take the city bus (B). The cost/trip for driving is $5 (PD) while the cost/trip for the bus is $2 (PB). Sean's Transportation Budget a. Driving 15 10 5 5 10 15 Bus Write down Sean's budget constraint given the information above. Graph the budget constraint as well using the graph above. Be sure to label it as BCI on the graph. b. Instead of paying per ride, Sean can also buy a weekly pass. The weekly pass costs a flat fee of $10 and is good for 7 rides. If Sean chooses to use the bus for any rides beyond those seven, he faces the normal price of $2/ride. Write down Sean's Budget constraint and graph it using the same figure above. Label as BC2. [Hint: Remember, Sean only pays the flat fee if he takes any trips, it does not apply if he only uses his car!]

Sean budgets $30 per week for transportation. To get around, he can either drive his car (D) take the city bus (B). The cost/trip for driving is $5 (PD) while the cost/trip for the bus is $2 (PB). Sean's Transportation Budget a. Driving 15 10 5 5 10 15 Bus Write down Sean's budget constraint given the information above. Graph the budget constraint as well using the graph above. Be sure to label it as BCI on the graph. b. Instead of paying per ride, Sean can also buy a weekly pass. The weekly pass costs a flat fee of $10 and is good for 7 rides. If Sean chooses to use the bus for any rides beyond those seven, he faces the normal price of $2/ride. Write down Sean's Budget constraint and graph it using the same figure above. Label as BC2. [Hint: Remember, Sean only pays the flat fee if he takes any trips, it does not apply if he only uses his car!]

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 1PA

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