Sketch a budget line for a household

Reference no: EM132115727

Question: Gas Prices Straining Budgets With gas prices rising, many people say they are staying in and scaling back spending to try to keep within their budget. They are driving as little as possible, cutting back on shopping and eating out, and reducing other discretionary spending.

a. Sketch a budget line for a household that spends its income on only two goods:

gasoline and restaurant meals. Identify the combinations of gasoline and restaurant meals that are affordable and those that are unaffordable.

b. Sketch a second budget line to show how a rise in the price of gasoline changes the affordable and unaffordable combinations of gasoline and restaurant meals. Describe how the household's consumption possibilities change.

Reference no: EM132115727

Questions Cloud

Clarify basic variables and nonbasic variables : What is the basic feasible solution you get from your last iteration (iteration 2)? Clarify basic variables and nonbasic variables.

Leadership training on the program at insight communications : Insight Communications promotes employees with good technical skills into supervisory positions and then teaches them leadership skills.

Will jim now be able and want to buy muffins : Jim has made his best affordable choice of muffins and coffee. He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each.

What is the marginal rate of substitution : You May Be Paid More (or Less) Than You Think It's so hard to put a price on happiness, isn't it? But if you've ever had to choose between a job you like.

Sketch a budget line for a household : Gas Prices Straining Budgets With gas prices rising, many people say they are staying in and scaling back spending to try to keep within their budget.

Training delivered fills training gap : What resources are available to help ensure that training delivered fills a training gap? The key to proving murder is proving “Malice Aforethought”.

Calculate amy real income in terms of cake : Amy has $20 a week to spend on coffee and cake. The price of coffee is $4 a cup, and the price of cake is $2 a slice. Calculate Amy's real income in terms.

Common mainstream practice in business organization : ERP system become a common mainstream practice in a business organization.

What is the slope of marc budget line : Marc has a budget of $20 a month to spend on root beer and DVDs. The price of root beer is $5 a bottle, and the price of a DVD is $10.

User Account

All Pages