Jacob receives an allowance of $5 per week. He spends all his allowance on ce cream cones, $0.50 per cone, and cans of Lemon Fizz soda, $1 per can. His budget constraint is shown on the graph to the right. Now suppose hat Jacob's allowance climbs to $7. Show how this alters his budget i constraint. Jacob's new budget constraint intersects the x-axis at cans of soda. (Enter your response as a whole number.) Jacob's new budget constraint intersects the y-axis at ice cream cones. (Enter your response as a whole number.) ACCES Ice cream (number of cones) 20- 19- 18- 17- 16- 15- 14- 13- 12- 11- 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- BC 9 10 11 12 Lemon Fizz (number of cans)

Jacob receives an allowance of $5 per week. He spends all his allowance on ce cream cones, $0.50 per cone, and cans of Lemon Fizz soda, $1 per can. His budget constraint is shown on the graph to the right. Now suppose hat Jacob's allowance climbs to $7. Show how this alters his budget i constraint. Jacob's new budget constraint intersects the x-axis at cans of soda. (Enter your response as a whole number.) Jacob's new budget constraint intersects the y-axis at ice cream cones. (Enter your response as a whole number.) ACCES Ice cream (number of cones) 20- 19- 18- 17- 16- 15- 14- 13- 12- 11- 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- BC 9 10 11 12 Lemon Fizz (number of cans)

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section21.1: The Budget Constraint: What The Consumer Can Afford

Problem 1QQ

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Jacob receives an allowance of $6 per week. He spends all his allowance on ice cream cones, $0.50 per cone, and cans of Lemon Fizz soda, $1 per can. His budget constraint is shown on the graph to the right. Now suppose that Jacob's allowance climbs to $10. Show how this alters his budget constraint. cans of soda. (Enter Jacob's new budget constraint intersects the x-axis at your response as a whole number.) Ice cream (number of cones) 20- 19- 18- 17- 16- 15- 14- 13- 12- 11- 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- 0- 0 T 1 2 BC. 5 6 7 8 9 10 11 12 Lemon Fizz (number of cans) Q Q
1. An individual's budget Suppose Sean has a weekly budget of $48 to spend on oat milk and peanut butter. Oat milk is priced at $4 per quart, and peanut butter is priced at $2 per jar. If Sean spends his entire $48 on oat milk, he can buy jars of peanut butter. Use the blue line (circle symbol) to plot Sean's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of oat milk and peanut butter that are affordable for Sean. Finally, place the black point (plus symbol) on the point on Sean's budget constraint that corresponds to a scenario in which Sean spends $24 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 38 33 30 27 24 21 18 15 12 8 3 0 ++ 0 + 36 9 12 15 18 21 24 OAT MILK (Quarts) 12 quarts of oat milk. If he spends his entire $48 on peanut butter, he can buy 24 27 30 33 36 BC, ($48) O Affordable Region + $24 on Each BC₂ ($60) ?
Anatoly's marginal utility for DVDS (D) is MU X and his marginal utility for Xbox games (X) is MUx D. Anatoly's income is $120, the price of a DVD is $20.00, and the price of an Xbox game is $10.00. How many DVDS and Xbox games does Anatoly consume to maximize his satisfaction? Anatoly consumesDVDs andXbox games. (Enter your responses using integers.)
Raymond consumes meatloaves and pineapples. He has decided that his monthly budget will be $1500. Suppose that one meatloaf costs $375, while one pineapple costs $150. What is the expression for Raymond’s budget constraint? Draw a graph of Raymond’s budget line (meatloaf on the y axis). Show how Raymond’s budget line changes if the price of pineapples increases to $370. Suppose Raymond decides to cut his monthly budget in half. Coincidentally, the next time he shops, he learns that meatloaves and pineapples are on sale for half price. Show what happens to Raymond’s budget line?
Suppose Kate has a weekly budget of $24 to spend on seltzer water and peanut butter. Seltzer water is priced at $2 per case, and peanut butter is priced at $6 per jar. If Kate spends her entire $24 on seltzer water, she can buy jars of peanut butter. Use the blue line (circle symbol) to plot Kate's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of seltzer water and peanut butter that are affordable for Kate. Finally, place the black point (plus symbol) on the point on Kate's budget constraint that corresponds to a scenario in which Kate spends $12 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 24 22 20 18 16 14 10 4 2 0 0 + 2 + 6 8 10 12 14 16 SELTZER WATER (Cases) 18 cases of seltzer water. If she spends her entire $24 on peanut butter, she can buy 20 22 24 O BC, ($24) 0 Affordable Region + $12 on Each BC₂ ($48) (?)
The nearby graph shows Charlie's budget constraint for purchases of shoes and purses. Number of 12 purses 10 8 6 4 2 0 Your answer Budget line with discount Budget line no discount 0.5 1 1.5 2 2.5 Number of pairs of shoes If Charlie's monthly budget for shoes and purses is $100 and they buy more than 2 purses, the price of purses is $. _. (Enter your answer as integers without the dollar sign.)
Matt has $19 in income that he devotes entirely towards caffeine purchases, specifically coffee and tea. Tea costs $3/cup and coffee costs $4/cup. Also, tea is subject to a quantity tax of $4/cup, and coffee is subject to a value tax of 0%. By how much will the slope of Matt's budget constraint change if his income were to increase from $19 to $37? (Note: I'm looking for the change in the slope, so subtract the old slope from the new slope to get your answer) (Note: The numbers change between questions, so read them carefully)
1. 2. Suppose Frank enjoys traveling and his utility is a function of the number of airplane trips he takes and the number of bus rides he takes. His utility function is given by U(b,p) = 3b0-4p0.8. A trip on a plane costs $400, a trip on the bus costs $50 and Frank has $3,000 to spend on travel. a. Draw Frank's budget line on a graph with bus trips on the vertical axis. b. Calculate AND INTERPRET the slope of Frank's budget line. c. Draw a representative indifference curve on your graph and provide a function that describes the slope of this indifference curve (i.e., find Frank's marginal rate of substitution). What is the INTERPRETATION of the marginal rate of substitution? d. What two conditions must be met in order for Frank to maximize his utility? e. What are the utility maximizing quantities of plane trips and bus trips for Frank? Given income of $1000, Px = 25 and Py = 40, find (1) a function for the MRS and (2) the utility maximizing consumption bundle for each of the…
Matt has $13 in income that he devotes entirely towards caffeine purchases, specifically coffee and tea. Tea costs $2/cup and coffee costs $3/cup. Also, tea is subject to a quantity tax of $4/cup, and coffee is subject to a value tax of 0%. By how much will the slope of Matt's budget constraint change if his income were to increase from $13 to $40?
1. Suppose Frank enjoys traveling and his utility is a function of the number of airplane trips he takes and the number of bus rides he takes. His utility function is given by U(b,p) = 3b0-4p0.8. A trip on a plane costs $400, a trip on the bus costs $50 and Frank has $3,000 to spend on travel. a. Draw Frank's budget line on a graph with bus trips on the vertical axis. b. Calculate AND INTERPRET the slope of Frank's budget line. c. Draw a representative indifference curve on your graph and provide a function that describes the slope of this indifference curve (i.e., find Frank's marginal rate of substitution). What is the INTERPRETATION of the marginal
Suppose Sam has a weekly budget of $48 to spend on juice and yogurt. Juice is priced at $4 per gallon, and yogurt is priced at $2 per container. gallons of juice. If he spends his entire $48 on yogurt, he can buy containers of If Sam spends his entire $48 on juice, he can buy yogurt. Use the blue line (circle symbol) to plot Sam's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of juice and yogurt that are affordable for Sam. Finally, place the black point (plus symbol) on the point on Sam's budget constraint that corresponds to a scenario in which Sam spends $24 on each good. Note: Dashed drop lines will automatically extend to both axes. ? 36 33 30 27 24 21 18 12 9 6 3 YOGURT (Containers) 0 0 + 3 6 9 12 15 18 21 JUICE (Gallons) 24 27 30 33 36 BC, ($48) 0 Affordable Region $24 on Each BC₂ ($60)
The budget set, or budget constraint, in the graph shows the possible combinations of brownies and ice cream cones that can be purchased. Assume that this person has a total of $18 to spend on brownies and ice cream cones. How much does a brownie cost? $ Assume that at point A, the marginal utility from a brownie is 10 and the marginal utility for an ice cream cone is 18. This person should consume more brownies and fewer ice cream cones. is utility maximizing. should consume more ice cream cones and fewer brownies.