Question

Suppose you won $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. Candy bars cost $0.75 each while bags of peanuts cost $1.50 each. a. Complete the table below (gray-shaded cells) showing the alternative combinations of the two products that are available. Instructions: Enter your answers as whole numbers. Alternative Combinations Goods 12 16 20 Candy bars Bags of peanuts ok b. Use the data in the table to plot a budget line in the graph. instructions: Use the tool provided Budget to draw a single budget line. Plot each of the six combinations (A - F) above.

Answer 1

No. of Candy Bars	Price ($)	Expenditure	Bags of Peanuts	Price ($)	Expenditure	Total Expenditure ($)
0	0.75	0*$0.75=0	$15/1.5 = 10	1.5	10*$1.5 = $15	15
4	0.75	4*$0.75=$3	($15-$3)/1.5 = 8	1.5	8*$1.5 = $12	15
8	0.75	8*$0.75=$6	($15-$6)/1.5 = 6	1.5	6*$1.5 = $9	15
12	0.75	12*$0.75=$9	($15-$9)/1.5 = 4	1.5	4*$1.5 = $6	15
16	0.75	16*$0.75=$12	($15-$12)/1.5 = 2	1.5	2*$1.5 = $3	15
20	0.75	20*$0.75=$15	($15-$15)/1.5 = 0	1.5	0	15

Final Answer

No. of Candy Bars	0	4	8	12	16	20
Bags of Peanuts	10	8	6	4	2	0

The horizontal axis is the candy bars and the vertical axis is peanuts. Budget line represents combination of two goods that can be purchased within the given level of budget.