Question

2. Todd earns $100/week, and spends all of his money on coffee and pizza. Coffee costs $5/cup and pizza costs $3/slice. He initially consumes 8 cups of coffee and 20 slices of pizza per week. a) Draw Todd's budget constraint and the indifference curve on which he is currently consuming b) the cost of coffee decreases to 2.50/ cup and pizza increases in price to $4/slice. Draw Todd's new budget constraint c) Is Todd better off or worse off? Explain.

Answer 1

Given :- coffee costs - $51 cup Pizza costs :_$3 loup . Todd consumes 8 cups of coffee and 20 slices of pizza a tis budget constraint itPrice of coffee x Quantity of coffee) tefrice of Різти халол 1 (5*8) + (3 x 20) x 100 which is his income. me, ... The point will fall on the budget line. 207 .... ........ (C,P) 13 167 Pizza447 o i 2 3 4 5 6 Coffee Ak_- Budget line CamScanner

Date: C) Giner: Elmira experiences an inflow of unskilled ... Labor • Effects (long run) on output -price ratio :- i Output of grain will rise and therefore, - supply of grain will be more comparatively and hence, price will fall .. e) Output - price ratio of novel will rise ... r price ratio :- 1) Factor price ratio for production of grain will a) fuelos prise Gratis for production of covers will --Autre Effects on Ls/Lu ratio 2) Is the ratio for productio grain will sine fall. w Ls/he ratio for novels will rise - fade Overall welfare of Elmira :- i Skilled labour will have a better living conditions than the unskilled labour force. PPF diagrams x B D Cs Scanne with CamScanner Grain Coutput)