Tom's monthly budget constraint 20 Number of hamburgers per month Refer to Figure below to answer, Assume Tom is on budget constraint AC and the price of a hamburger is $4.00. Tom's monthly income is Refer to Figure below to answer. Along budget constraint AC, the opportunity cost of one hamburger is Assume Tom's budget constraint is AC. He will have leftover income if he purchases the bundle represented by point Number of hot doge guo d
Q: Consider Alexei who makes $1,400 per week and just won a 'set for life lottery ticket which involves…
A: Budget Constraint shows that the value of all the goods that a consumer consumes should be less than…
Q: A) What is substitution effect? And how it effects purchase decision of consumer? in detail B)What…
A: The economics refers to the study of human behavior in response to the use to limited or scarce…
Q: Tom's monthly budget to spend on eating and drinking is 500 euros. One beer costs 3 euros and a…
A: Budget constraint: 500 = 3B + 2P
Q: a. Marsha has a salary of $500. He spends his entire budget on milk and cookies. The cost of a…
A: The budget constraint of an individual shows different combinations of two goods that an individual…
Q: Number of cassette tapes per month Mark's budget constraint is AB. It would pivot to AC if the price…
A: Budget constraint of an individual explains the combinations of two goods that can be purchased with…
Q: When Amanda wakes up in the morning, she will either purchase Timbits (T) or a bagel (B). This is…
A: * ANSWR :-
Q: Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hot dog is $3, the…
A: The slope of budget constraint , which tells us that a consumer must lose some units of a good to…
Q: A penurious graduate student has a food budget of $100.00/week. To survive with sufficient energy to…
A: The budget of the student is $100 per week. Protein requirement is 50 is units. Cost of hamburger…
Q: soda). Furthermore, assume that it is impossible for loe to spend more than his budget (that is, his…
A: The optimal consumption rule says that when a consumer maximizes utility, the marginal utility per…
Q: o make sure he has enough energy for the teaching, Ernie spares $60 every week to spend on Blue Bull…
A: Given, Total money available: M =$60 Price of Blue Bull drink: Pb = $2 Price of Gigantic energy…
Q: Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a…
A: Budget line is a graphical representation of all possible combinations of two goods which can be…
Q: (a) (b) (c) 'Write down Tom's budget constraint. Write down Tom's optimal consumption-leisure…
A: a) Tom's budget constrain can be written as C=w(h-l) C= Consumption w = wage rate h = 24…
Q: Malena has $800 per month to spend on electricity and "other goods". Price of "other goods" is one,…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: W 7 Ms. Bain maximizes 6. utility (given her budget constraint) at point X, skiing 2 days and…
A: An ordinal utility function is a function that represents an agent's preferences on an ordinal scale…
Q: . Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Andre has a salary of 1000. He spends his entire salary on shoes and beer. The cost far a pair of…
A: Budget constraint represents the combination of two goods that the income earner can purchase given…
Q: the price of food, and Po the price of clothing. Clothing. C (unts per woek) 50 The vertical…
A: Answer is as follows:
Q: 1.5 Kristine is a fan of both romantic movies and classical concerts. This month she has $480 to…
A:
Q: The consumer gets positive benefits from consuming bread (B) and cake (K). Consumer utility is as…
A: MRS = MUBMUK = 20*2 B K20 B2=2KB Price ratio: pBpK = 200400 = 12 Budget Constraint: pB*B + pK *K =…
Q: For lunch, Misha eats only salads or fruit & yogurt smoothies. Her weekly food budget is $48. Each…
A: here we can calculate the given as follow
Q: Mega Partner is selling two products Marker(m) and Eraser(e) and their budget is given with the…
A: (Since you have posted a question with multiple sub parts, we will solve the first three sub parts…
Q: Consider Alexel, who earns a wage of $15 per hour in the hospitality industry. Recently, Alexel won…
A: Each consumer chooses a bundle where utility is maximized.
Q: b. Mary has two dinner options available: eating a home cooked meal for $150 per meal, or at a…
A: The budget line(BL) shows the various combination of two goods(g) that the consumer(C) can afford…
Q: Consider a consumer's annual budget constraint for two goods: "everything else" and "tools". When…
A: A budget line is a graphical representation of a combination of all the commodities that a consumer…
Q: The vending machine in Katherine's office building offers cans of pop and candies. Katherine's…
A: Answer: Given, Utility function: U=3PC Price of pop PP=$1Price of Candy PC=$0.5Total income M=$10…
Q: 2. Zhoran has a budget of $36 for fruit. Strawberries cost $4 per pound and grapes cost $3 per…
A: Consumer will maximise utility at a point where slope of an indifference curve is equal to the slope…
Q: Mehmet has a monthly budget of 440TL, which he likes to spend on books (b) and movie tickets(m).…
A: Answer: Note: Excel will not be used, but we are also not allowed to use paper. Given, Monthly…
Q: Homer Simpson has a budget of $100 allocated for the consumption of burgers and donuts. If the price…
A: Budget(M)= 100 Burger (B) price(p1) =% 5 ,and Donut (D) price(p2)=%2.50 Budget constraint, M=…
Q: Suppose the price of a home cooked meal increases to $200 and income increases to $4200. Show the…
A: Given, Price of cooked meal at home = $150 per meal Price of cooked meal at restaurant = $260 per…
Q: b. Mary has two dinner options available: eating a home cooked meal for $150 per meal, or at a…
A: (i) Assume Px is the home cooked meal =150 per meal Py is restaurant meal = 260 per meal Weekly…
Q: Soru 6 Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the…
A: Answer - Budget Constraint:- It is the equation or constraint which show all the combination of…
Q: Consider Alexei who makes $1,400 per week and just won a ‘set for life’ lottery ticket which…
A: Given, Alexei makes $1,400 per week and won a 'set for life' lottery ticketFortnightly payment :…
Q: A consumer has an annual budget constraint for two goods: “housing sq. ft." and "$ for everything…
A: Given information Income=50000 Price of housing per square feet=200 Let's take Price of the other…
Q: a. Andre has a salary of $1000. He spends his entire budget on shoes and beers. The cost for a pair…
A: The budget constraint shows all the different combinations of two goods that an individual is able…
Q: Consider Justin who makes $1,400 per week and just won a ‘set for life’ lottery ticket which…
A: Budget Constraint shows that the value of all the goods that a consumer consumes should be less than…
Q: Suppose Alphonso’s town raised the price of bus tickets to $1 per trip (while the price of burgers…
A: The potential gains that a private, investor, or organisation misses out on once selecting one…
Q: Question 3 a. Marsha has a salary of $500. He spends his entire budget on milk and cookies. The…
A: Dear student, Since you have asked multiple questions, we will solve the first question for you. If…
Q: Write the necessary condition (NC) for the consumer’s optimization problem and illustrate it by…
A: a)
Q: As described in Exercise 8.1, Lucy wants carpets and paintings for here office. Her company has…
A: Answer to the question is as follows :
Q: 1. The individual faces a budget constraint in period 1 of Pīc1+81 2 budget constraint of P,C2 =…
A: A consumer's utility curve or function defines the ideal combination of expenditures that maximizes…
Q: Refer to the information provided in Figure below to answer the question that follow. A C D Number…
A: In economics, a budget constraint refers to all potential combinations of commodities that someone…
Q: Assume Tom is on budget constraint AC and the price of a hamburger is $4.00. Tom's monthly income is…
A: Here we calculate the income of Tom by using the given budget constraint and choose the correct…
Q: Consider Alexei who makes $1,400 per week and just won a ‘set for life’ lottery ticket which…
A: Budget constraint outlines the scope of decisions accessible reasonably affordable(within a budget).…
Q: Hübert brings $40 to a football game to spend on hot dogs and beer. The following diagram shows his…
A: Budget constraint: - it is a graphical representation of different bundles of goods that a consumer…
Q: Assume a consumer is attempting to maximize utility subject to the budget constraint by choosing…
A: Given that When price of good 1 and good 2 are equal to 10, quantity demanded of good 1 and good 2…
Q: Consider Alexei who makes $1,400 per week and just won a ‘set for life’ lottery ticket which…
A: Budget Constraint shows that the value of all the goods that a consumer consumes should be less than…
Q: A consumer has income of $3,000. Wine costs $3per glass, and cheese costs $6 per pound. Drawthe…
A: In economics, a budget constraint reflects all the combinations of goods and services that a…
Q: Mika earm $235 per week which she spends entirely at the grocery store, purchasing either food or…
A: Income = 235/week Price of Food = $1/ unit Price of Alcohol = $7/ unit Addition receives $76/week…
Q: Assume Tom is on budget constraint AC and the price of a hamburger is $4.00. Tom's monthly income…
A: Given, Budget constraint of Tom is AC. Tom can purchase maximum of 20 units of hamburger or 40 hot…
Q: Is it possible for total utility to increase while marginal utility diminishes? Explain.
A: It is possible for total utility to increase and marginal utility to decrease. This phenomenon is…
All these three questions are given in the first picture and their choices are given in the second picture that are same but questions are different.So solve all of these objective question.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Suppose Alphonsos town raises the price of bus tickets from 0.50 to 1 and file price of burgers rises from 2 to 4. Why is file opportunity cost of bus tickets unchanged? Suppose Alphonsns weekly spending money increases from 10 to 20. How is his budget constraint affected from all three changes? Explain.Draw Maries budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of me budget constraint?Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utility—maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.
- a. Andre has a salary of $1000. He spends his entire budget on shoes and beers.The cost for a pair of shoes is $15 and the cost for can of beer is $25.i. Construct Andre’s budget constraint (place) beers on the y-axis. [4marks]ii. Suppose Andre’s salary rises by 25%. Also suppose that the price ofshoes and beers each rise by 40%. Construct Andre’s new budget constraint. What is the difference between the new and old budgetconstraints? [4 marks]iii. Suppose that the price of beers fell from $25 per beer to $15. ConstructAndre’s new budget constraint. What is the difference between the newand old budget constraints. [4 marks]b. Explain the relationship between the budget constraint and indifference curveat consumer optimum. [3 marks]A consumer has income of $3,000. Wine costs $3per glass, and cheese costs $6 per pound. Drawthe consumer’s budget constraint with wine onthe vertical axis. What is the slope of this budgetconstraint?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…
- b. Mary has two dinner options available: eating a home cooked meal for $150 permeal, or at a restaurant for $260 per meal. Her weekly budget is $2500.iv. Suppose the price of a home cooked meal increases to $200 and incomeincreases to $4200. Show the impact of the new budget line relative to theoriginal budget line. What would be the new marginal rate of substitutionthat corresponds to the optimal consumption choice? Interpret themarginal rate of substitutionMary has two dinner options available: eating a home cooked meal for $150 permeal, or at a restaurant for $260 per meal. Her weekly budget is $2500. i. Draw Mary’s budget constraint, (put home cooked meal on the horizontalaxis) showing the trade-off between a home cooked meal and eating at arestaurant. ii.Draw an indifference curve showing the optimum choice. Label theoptimum as point A. iii. What would be the marginal rate of substitution at the point thatcorresponds to the optimal consumption choice? Interpret the marginalrate of substitutionMary has two dinner options available: eating a home cooked meal for $150 permeal, or at a restaurant for $260 per meal. Her weekly budget is $2500.i. Draw Mary’s budget constraint, (put home cooked meal on the horizontalaxis) showing the trade-off between a home cooked meal and eating at arestaurant. ii. Draw an indifference curve showing the optimum choice. Label theoptimum as point A. iii. What would be the marginal rate of substitution at the point thatcorresponds to the optimal consumption choice? Interpret the marginalrate of substitution. iv. Suppose the price of a home cooked meal increases to $200 and incomeincreases to $4200. Show the impact of the new budget line relative to theoriginal budget line. What would be the new marginal rate of substitutionthat corresponds to the optimal consumption choice? Interpret themarginal rate of substitution. Please refer to question iv.
- Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. a. Given this information, construct the equation for Akua’s Budget Line. b. The following are the bundles that Akua can afford with her income: Yoghurt Bread 10 0 80 20 Fill the blanks in the table with the quantities that will exhaust Akua’s income. c. Akua gets a research grant and her income increases to GHS 800 per month. What is the new equation of her budget line? What if income stays constant at GHS 400 and the price of Yoghurts increase to GHS10? d. Assume that prices are the same as used in part a. If the marginal utility of a Yoghurt is 20, what is the marginal utility of Bread if she is maximizing her utility? e. Now assume that Yoghurt and Bread are compliments for Akua. For her to consume all her income of GHS…Garfield enjoys pizzas and hanging out (leisure). He sleeps 8 hours per day. Of the remaining16 hours, for each hour he chooses to work he gets paid 2 pizzas. Garfield must pay 6 pizzas intaxes but receives dividends equivalent to 6 pizzas.1. Draw Garfield’s budget constraint (put consumption on the vertical axis and leisure of thehorizontal). Make sure to show the vertical and horizontal intercepts as well as the slope.b. Now suppose that Garfield chooses to work 10 hours per day. Find how many hoursof leisure and how many pizzas he will consume.c. Using your answer from b, show Garfield’s optimal point on the budget line and drawthe indifference curve passing from that point.4. Suppose that Garfield’s wage falls to 1 pizza per hour. Draw Garfield’s new budgetconstraint. Make sure to show the value of any intercept that has changed.5. Suppose that in response, Garfield decides to work for 6 hours per day. How much leisurewill he take, and how much pizza will he consume?6. Use an…Garfield enjoys pizzas and hanging out (leisure). He sleeps 8 hours per day. Of the remaining16 hours, for each hour he chooses to work he gets paid 2 pizzas. Garfield must pay 6 pizzas intaxes but receives dividends equivalent to 6 pizzas.1. Draw Garfield’s budget constraint (put consumption on the vertical axis and leisure of thehorizontal). Make sure to show the vertical and horizontal intercepts as well as the slope.b. Now suppose that Garfield chooses to work 10 hours per day. Find how many hoursof leisure and how many pizzas he will consume.c. Using your answer from b, show Garfield’s optimal point on the budget line and drawthe indifference curve passing from that point.4. Suppose that Garfield’s wage falls to 1 pizza per hour. Draw Garfield’s new budgetconstraint. Make sure to show the value of any intercept that has changed.5. Suppose that in response, Garfield decides to work for 6 hours per day. How much leisurewill he take, and how much pizza will he consume?6. Use an…