A consumer has a $1,800 budget for entertainment, which she splits between going to concerts and seeing movies at the ArcLight in Hollywood. Movie tickets cost on average $18 each and concert tickets cost on average $40 each. Draw the consumer’s budget line on a graph.
For each of the following situations, draw a new graph with the updated budget line from below (for a total of five separate graphs). Label each line. If the new lines differ from the original budget line, explain why it has shifted.
A consumer has a $1,800 budget for entertainment, which she splits between going to concerts and...
Question 8 2 pts Kim has $23 per week in her entertainment budget. She splits her time between going to the movies and yoga classes. Each movie costs $8 while each yoga class costs $3. The total utility from each of these activities is set out in the table below. What's Kim's total utility maximizing point? That is, what combination of movies and yoga classes will maximize Kim's total utility? Movies Total Utility Yoga Classes Total Utility 0 0 0...
Jasmine loves to support her local sports teams. She has an annual budget of $400 to divide between basketball games and football games. Tickets to a basketball game cost $25, and tickets to a football game cost $100. Jasmine loves to support her local sports teams. She has an annual budget of $400 to divide between basketball games and football games. Tickets to a basketball game cost $25, and tickets to a football game cost $100. Football games Tools 044...
1) Consumer Theory (4 points) Liz's annual sports budget is $400, and she spends it attending Oakland A's games and Raiders games. A's tickets cost $20 each and Raiders tickets are $50 each. a. Graph Liz's budget constraint. b. Suppose the price of A's tickets decreases to $10. Show the effect on Liz's budget constraint on your graph (be sure to label clearly). C. Analyze the income effect and substitution effect for Liz after the price change. i. Describe the...
An individual's budget Suppose Latasha has a monthly budget of $80 to spend on coffee and cereal. Coffee is priced at $4 per cup, and cereal is priced at $2 per box. If she spends her entire $80 on cereal, she can buy _______ cups of coffee. If Latasha spends her entire $80 on coffee, she can buy boxes of cereal. Use the blue line (circle symbol) to plot Latasha's budget constraint on the following graph. Next, use the orange point (square symbol)...
1) Sarah has a certain amount of money budgeted for tea and snacks during the work week, and she always aims to spend her entire budget. If she spends her entire budget on tea, she can afford 40 cups of tea. If she spends her entire budget on snacks, she can afford 8 snacks. What is the opportunity cost of a snack? Provide your answer below: _ cup(s) of tea 2) If a family spends its entire budget in a...
Suppose a consumer has income of $100 that she can spend on doctors' visits, which cost $20 each or "other goods," which we will represent with a composite good whose price is $1 per unit (i.e,the numeraire). (a) Illustrate her budget constraint The government is considering offering one of the following three health plans to con- sumers. Plan A will simply give everyone an additional $40 of income (perhaps through a tax cut). Under plan B, the government will give...
8. Consumer surplus using utility curves Suppose Becky has an allowance of $42 to spend on movies and other goods each month (represented by budget constraint CF). The following graph shows her initial utility ( U1 ) at point A from spending $21 of her total allowance on three movies ($7 each) and the remaining $21 on other goods. Tool tip: Mouse over the points on the graph to see their coordinates 60 D 50 40 B A 20 10...
Homework (Ch 21) Suppose Juanita has a monthly budget of $80 to spend on milk and cereal. Milk is priced at $4 per gallon, and cereal is priced at $2 per box. If Juanita spends her entire $80 on milk, she can buy cereal 80 gallons of milk. If she spends her entire $80 on cereal, she can buy boxes of Use the blue line (circle symbol) to plot Juanita's budget constraint on the following graph. Next, use the orange...
Gina works at a diner. She has 100 hours each week to spend at labor/leisure, earns a wage of $15 per hour, and works in a fancy modern restaurant that doesn't involve tips from customers. She has no sources of non-labor income, but she does have to pay $200 per week in childcare for her precious baby Carlos (regardless of how many hours she actually utilizes the childcare). Her utility function is U 1. 0.001CL2 (3 points) Each week she...
INCOME (Dollars) Kate has 80 hours per week to devote to working or to leisure. She is paid an hourly wage and can work at her job as many hours a week as she likes. The following graph illustrates Kate's weekly income-lelsure tradeoff. The three lines labeled BC, BC, and BC illustrate her time allocation budget at three different wages; points A, B, and C show her optimal time allocation choices along each of these constralints BC 1200 BC 800...