Draw the budget constraint to scale, marking the intercepts

Assignment Help Econometrics
Reference no: EM131072541

The price of cappuccinos is $3, the price of a theatre ticket is $12, and consumer income is $72.

(a) In a graph with theatre tickets on the vertical axis and cappuccinos on the horizontal axis, draw the budget constraint to scale, marking the intercepts.

(b) Suppose the consumer chooses the combination of 4 theatre tickets and 8 cappuccinos. Draw such a point on the budget constraint and mark the affordable and non-affordable regions.

(c) Is the combination of 3 tickets and 24 cappuccinos affordable?

(d) Is the combination in part (c) preferred to, or less preferred than, the chosen point in part (b)? (e) If the price of cappuccinos falls to $2 per cup, is the combination of 24 cappuccinos and 3 tickets affordable?

Reference no: EM131072541

Questions Cloud

Illustrate this budget constraint : Instead of the ration in the preceding question, suppose that the government increases taxes on gasoline, in addition to the market price increase
Which of these four scenarios are most important today : Prepare a 2-3 page paper using APA format discussing problem in the "Problems to Ponder" - Which of these four scenarios are most important today?
What are some ways that data mining could be used : What are some ways that data mining could be used to detect fraud in health insurance claims? How could private insurance companies and public government agencies collaborate to combat insurance fraud?
How would you look at these in context of an organization : Many complex problems facing today's healthcare managers have a financial, legal, and ethical implications for their organization. Identify a legitimate healthcare problem, and then identify and discuss the financial, legal, and ethical implicatio..
Draw the budget constraint to scale, marking the intercepts : In a graph with theatre tickets on the vertical axis and cappuccinos on the horizontal axis, draw the budget constraint to scale, marking the intercepts.
Develop and implement in a simulation environment : Develop and implement in a simulation environment a model of a the system described in the manufacturing case problem below but assuming that the system will have all the space that is needed between stations.
Which of the four properties outlines : Which of the four properties outlines in Section 6.3 would such indifference curves violate?
Explore the ethical implications of abortion : What are the major types of procedures available today and what are some of the ethical issues associated therewith?
Develop and compute the results from an analytic model : Develop and compute the results from an analytic model of the serial line using the equations in chapter 6. Note that the equation for cd2 gives the squared co-efficient of variation of the time between arrivals to the next workstation.

Reviews

Write a Review

Econometrics Questions & Answers

  What would be the equivalent net savings per machine-hours

you have purchased an equipment costing $20,000. the equipment will be used for two years and at the end of two years its salvage value is expected to be $10,000 the equipment will be used 6,000 hours during the first and 8,000 hours during the se..

  What will be the corresponding nominal interest rate

Suppose that the velocity of money is not constant but is growing at 1% per year. Real GDP is growing by 5% per year. If the central bank wants to reduce the rate of inflation to 3%, what must be the new rate of money growth? If the real rate if r..

  Calculate the optimal money growth rate needed for the fed

Suppose that the Fed's inflation target is 2%, potential output growth is 3.5%, and velocity is a function of how much the interest rate differs from 5%: %^V= 0.5 X (i-5). Suppose that a model of the economy suggests that the real interest rate

  How these events will affect the economy production curve

an economy is faced by the exhaustion of an important natural resource at a time when it is introducing improved technology.using a diagram how these events will affect the economy production possibility curve

  Find what money growth rate should the fed aim

Suppose that the Fed's inflation target is 2%, potential output growth is 3.5%, and velocity is a function of how much the interest rate differs from 5%: %^V= 0.5 X (i-5). Suppose that a model of the economy suggests that the real interest rate is..

  Determine what is the direct utility function

Consider the indirect utility function: v(p1; p2; m) = m /(p1 + p2) a. Derive the Marshallian demand functions.b. What is the expenditure function c. What is the direct utility function

  Solve for her optimal choices of consumption

Consider an individual with preferences over consumption c and leisure l given by: u(c,l) = [(c^(1-γ ))/(1-γ)] + al where γ > 0 and a > 0 are constants. She is endowed with h hours of time to divide between working at wage w and leisure. She has no..

  Calculate the price elasticity of demand for airplanes

The demand for Airplanes is represented by this equation : Qd=53,230 - .8V+.05Vr-3,600Vh + 4T V is the Price for Airplanes Vr is the price per trip in boats Vh is the price per gallon of gasoline T is the average income of a consumer

  Determine profit-maximizing amount of electricity to produce

Q1 kilowatts are produced at facility 1, and Q2 kilowatts are produced at facility 2 (so Q = Q1 + Q2). The costs of producing electricity at each facility are given by C1(Q1) = 8,000 + 6Q12and C2(Q2) = 6,000 + 3Q22, respectively. Determine the pro..

  How much does the second annuity pay each year

The applicable discount rate is 7 percent. One annuity pays $4,000 on the first day of each year for twenty years. How much does the second annuity pay each year for twenty years if it pays at the end of each year.

  What is the optimal price of the textbook

What is the optimal price of the textbook from the author's point of view and by how much would the demand for the textbook change if advertising were increased by 2%?

  What is the p value for a two tailed hypothesis test

in a random sample of 25 individuals, you find the average to be 44.473 movies with a sample variance of 81. what is the p value for a two tailed hypothesis test where the null is that the tru population value is 40 movies

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd