# Diagram the following budget constraints: a. Income = $4,000; P X =$50; P Y = $100 b. Income =$3,000; P X = $25; P Y =$200 c. Income = $2,000; P X =$40; P Y = $150 BuyFind ### Microeconomics 13th Edition Roger A. Arnold Publisher: Cengage Learning ISBN: 9781337617406 BuyFind ### Microeconomics 13th Edition Roger A. Arnold Publisher: Cengage Learning ISBN: 9781337617406 #### Solutions Chapter Section Chapter C, Problem 1QP Textbook Problem ## Diagram the following budget constraints: a. Income =$4,000; PX = $50; PY =$100 b. Income = $3,000; PX =$25; PY = $200 c. Income =$2,000; PX = $40; PY =$150

Expert Solution

(a)

To determine

The budget constraint.

### Explanation of Solution

Since the income is $4,000 and price of good X is$50, the quantity of good X can be calculated as follows:

Quantity of good X=IncomePrice of good X=$4,000$50=80

Thus, the consumer will consume 80X.

Since the income is $4,000 and price of good Y is$100, the quantity of good Y can be calculated as follows:

Quantity of good Y=IncomePrice of good Y=$4,000$100=40

Thus, the consumer will consume 40Y.

Now, the budget constraint can be represented as follows:

In Figure 1, the vertical axis measures the quantity of good Y and the horizontal axis measures the quantity of good X.

Economics Concept Introduction

Budget constraints: Budget constraint refers to the possible combination of goods and services that a consumer can purchase at a given price level with the entire income.

Expert Solution

(b)

To determine

The budget constraint.

### Explanation of Solution

Since the income is $3,000 and price of good X is$25, the quantity of good X can be calculated as follows:

Quantity of good X=IncomePrice of good X=$3,000$25=120

Thus, the consumer will consume 120X.

Since the income is $3,000 and price of good Y is$200, the quantity of good Y can be calculated as follows:

Quantity of good Y=IncomePrice of good Y=$3,000$200=15

Thus, the consumer will consume 15Y.

Now, the budget constraint can be represented as follows:

In Figure 2, the vertical axis measures the quantity of good Y and the horizontal axis measures the quantity of good X.

Economics Concept Introduction

Budget constraints: Budget constraint refers to the possible combination of goods and services that a consumer can purchase at a given price level with the entire income.

Expert Solution

(c)

To determine

The budget constraint.

### Explanation of Solution

Since the income is $2,000 and price of good X is$40, the quantity of good X can be calculated as follows:

Quantity of good X=IncomePrice of good X=$2,000$40=50

Thus, the consumer will consume 50X.

Since the income is $2,000 and price of good Y is$150, the quantity of good Y can be calculated as follows:

Quantity of good Y=IncomePrice of good Y=$2,000$150=13.33

Thus, the consumer will consume 13.33Y.

Now, the budget constraint can be represented as follows:

In Figure 3, the vertical axis measures the quantity of good Y and the horizontal axis measures the quantity of good X.

Economics Concept Introduction

Budget constraints: Budget constraint refers to the possible combination of goods and services that a consumer can purchase at a given price level with the entire income.

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