Question

The Edit View History Bookmarks People Tab Window Help a $ 75%C5 Mon 12:32 PM Manav Patel when Grabend Solutions to Algebra and Trio x Mind Tap.Cangage Learning x Orange Micro Chapter 21 x English LC 7 Sec VIO (22 x + ng cengage.com / index.html58N-97813370065778snapshotid 146294540-6408831295 be A Home Bofinja Discord DRECTVGuide. Movies Free Fantasy Football 2. MYSJSU S Suardigher Textbooks para Bernies < CENGAGE MINDTAP Search this cours Chapter 21: Graded Homework 2. in a budget constraint brings 530 i fote ndone and the fo r m show budget con walang y Tools 290TLIGOS.00%94%C22405 MacBook Pro command option

cengage ch 21 micro

Answer 1

A budget constraint represents all the combinations of goods and services that a consumer may purchase given current prices within his or her given income. The quantity of one good is measured on the horizontal axis and the quantity of the other good is measured on the vertical axis.

The interceps of a budget constraint are calculated by assuming that the consumer spends whole income on one good and buys zero quantity of the other. For intercept of y axis= income/ price of beer

Since the intercept of y axis is quantity level 10; 10=30/ price of beer, that is, price of beer= 30/10= $3.

Similarly, price of hot dogs = $3

According to the diagram, hot dogs cost $3 each and beer costs $3 per glass.

If he had brought more money to the stadium, his budget constraint would shift rightward by the appropriate amount. That is, he could now buy more of at least one good. Since the prices remain same, the budget constraint shifts parallely as the slope remains same. The slope of a budget constraint = price of good x/ price of good y. Now the budget constraints cuts x axis and y axis on higher points due to increase in income.

BEERS Hot Po43

BC0 is initial budget constraint and BC1 is new budget constraint.