Question

Assume you have a budget of $600 for travel that you will spend on gasoline and...

  1. Assume you have a budget of $600 for travel that you will spend on gasoline and food. Assume the price of gasoline is $5.00 per gallon and the price of food is $15 per meal.

  1. Graph the budget line placing food on the horizontal axis indicating the x and y intercept values (the maximum possible of each).

  1. On your graph as point A show the consumer purchases 75 units of gasoline. How many meals can be purchased? Clearly label this point on your graph.

  1. Graph the new budget line when the price of meals increases to $20. Label it as BL2.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Your uncle Eugenius generously gives you an allowance of $300 each semester to spend on...
1. Your uncle Eugenius generously gives you an allowance of $300 each semester to spend on ski lift tickets and meals out with friends. Every time you go out to eat you spend pM = $20 per meal. Ski lift tickets cost pS = $60 each. The quantities of meals out and ski days you consume are denoted qM and qS, respectively. (a) Write down the equation for your budget constraint. Calculate the intercepts and slope (or, equivalently, the Marginal...
A consumer has 100 dollars to spend on two goods, price of a sweater is $...
A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10 and price of shoes is $ 20. Assume the consumer’s budget line has shoes on the vertical axis and sweaters on the horizontal axis; Determine the slope of the budget line _____ (give your answer in decimals) What is the vertical intercept of the budget line?________ What will be the effect of an increase of income on the budget line______ (use one of...
ou have two goods food and Shelter. When you have vertical axis for the number of...
ou have two goods food and Shelter. When you have vertical axis for the number of food and horizonal axis for the number of shelters. Assume you have MRS = 3in this case.a)What does it mean by MRS of food (on the vertical axis) for shelter (on the horizontal axis) =3?b)if the price of food is 5, and if the shelter price is 10, then the consumer is not maximizing his utility. Sketch a budget line, assuming the consumer has...
A. Draw a typical demand curve for gasoline in Charlotte. Label the axis and the demand...
A. Draw a typical demand curve for gasoline in Charlotte. Label the axis and the demand curve. Assume that the current price is $2.65 per gallon. Shade in the consumer surplus in the market. B. What does consumer surplus measure? What are the units for consumer surplus? C. On the same graph as A above, show an increase in price to $2.95. Mark the change in consumer surplus. Is this a loss or a gain in consumer surplus?
You have a monthly income of $4,000, which you spend on medical care and clothing. Medical...
You have a monthly income of $4,000, which you spend on medical care and clothing. Medical care costs $400 per unit and clothing costs $100 each a. Present an equation representing your budget line. (2) b. Present a graph showing your budget line and set. Label each clearly as BL and BS respectively. (4)
B. Consider a consumer choosing between two goods, food and gasoline. Suppose her monthly income is...
B. Consider a consumer choosing between two goods, food and gasoline. Suppose her monthly income is $1200 and average price of food per unit is $30. Price of gasoline per liter is $4. Suppose that the government levies a per unit consumption tax on gasoline. The tax rate is set to 20 percent. (a) Illustrate this change on a new graph with gas on the horizontal axis and explain if the consumer is better/worse off (indicate slope and intercepts) (b)...
Assume that both air travel and travel by car are normal goods and you spend a...
Assume that both air travel and travel by car are normal goods and you spend a fixed amount of income on both goods. Suppose that when the price of crude oil goes up by 30%, the price per mile of air travel goes up by 10% and the price per mile traveled by car goes up by 20%. Explain how the increase in the price of crude oil affects air travel and travel by car in terms of the income...
jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of...
jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of a burger is $4 and milkshakes are $3 .a.Write the equation for Jane’s budget constraint .b.Graph Jane’s budget constraint with burgers on the horizontal axis. Be sure to label both the x-intercept and the y-intercept with the proper value. c.If Jane spends all of her money on these two goods, how many milkshakes can she buy if she buys three burgers this week? d.Draw...
Jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of...
Jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of a burger is $4 and milkshakes are $3. a. Write the equation for Jane’s budget constraint. b.Graph Jane’s budget constraint with burgers on the horizontal axis. Be sure to label both the x-intercept and the y-intercept with the proper value. c.If Jane spends all of her money on these two goods, how many milkshakes can she buy if she buys three burgers this week?...
1. A consumer has $60 per day to spend on product A, which has a unit...
1. A consumer has $60 per day to spend on product A, which has a unit price of $5, and product B, which has a unit price of $10. What is the slope of the budget line if good A is on the horizontal axis and good B is on the vertical axis? 60/5. -10/5. -5/10. 5/10. Cannot be determined
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT