You have $150 to spend on food and clothing. The price of food and clothing are...
You have $150 to spend on food and clothing. The price of food and clothing are $5 and
$15 respectively.
(a) Write down the equation for the budget line, and graph it.
(b) Suppose that the government subsidizes clothing such that each unit of clothing is
half-price, up to the rst 6 units of clothing. More than 6 units of clothing purchase
is still priced at $15 per unit. Write down the equation for the budget line under this
subsidy, and graph this new budget constraint.
Draw the budget constraints for (a) and (b) separately. In all your graphs, label both axes,
and numerical value of intercepts on both axes.
Homework Answers
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You have $150 to spend on food and clothing. The price of food
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9 kmlv.github.io Question 2: A consumer has an income of $1,000 to spend on food and...
9 kmlv.github.io Question 2: A consumer has an income of $1,000 to spend on food and medicine. The price of one unit of food is $5 and the price of one unit of medicine is $10. For each question, write down the mathematical expression of the budget constraint and draw it carefully. Put food on the x-axis and medicine on the y-axis. Label the incercepts,slopes, and kinks. 1. Suppose the consumer receives coupons for 50 units of food and those...
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9 kmlv.github.io Question 2: A consumer has an income of $1,000 to spend on food and medicine. The price of one unit of food is $5 and the price of one unit of medicine is $10. For each question, write down the mathematical expression of the budget constraint and draw it carefully. Put food on the x-axis and medicine on the y-axis. Label the incercepts,slopes, and kinks. 1. Suppose the consumer receives coupons for 50 units of food and those...
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