Write down budget constraint - budget line, Financial Management

Assignment Help:

You have $20 to spend on high quality pens and low quality pens. High quality pens cost $5 each and low quality pens cost $2 each.   

(a) Suppose that you will spend your entire $20. Write down your budget constraint. You may simply write out the equation or draw the budget line. You don't need to do both.

(b) If you buy 5 low quality pens, how many high quality pens can you afford?  

(c) If you are given 25% increase in your budget, write down your budget constraint. You may simply write out the equation or draw the budget line. You don't need to do both.

 (d) If you were not given a 25% increase in your budget, are there any prices for high quality pens and low quality pens that would leave you with the same budget constraint as part (c)? If yes, what are they?


Related Discussions:- Write down budget constraint - budget line

What is logistics, What is logistics? Explain the important activities in l...

What is logistics? Explain the important activities in logistics systems. Logistics - meaning . Working of logistics systems - three important activities - Order processing, I

Financial derivatives, Do you provide plaigerism free solutions to question...

Do you provide plaigerism free solutions to questions or do you only tutor?

Term money, Short-term funds having a maturity of 15 days and over ar...

Short-term funds having a maturity of 15 days and over are categorized as term money. Banks access this term money route to bring greater stability in their short

13 basic ratios, What its the net income? Total current assets, plant and e...

What its the net income? Total current assets, plant and equipment, net plant and equipment, our net account receivable?

Social responsibility-business ethics-business entity, Social responsibilit...

Social responsibility The firm must decide whether to operate strictly in their shareholders' best interests or be responsible to their employers, their customers, and the soc

Explain about opportunity cost of capital, Explain about opportunity cost o...

Explain about opportunity cost of capital Risk free rate compensates for opportunity lost and risk premium compensates for risk. It can also be known as the 'opportunity cost o

What is business combinations, Q. What is Business Combinations? Combin...

Q. What is Business Combinations? Combining of two entities. Under PURCHASE METHOD OFACCOUNTING, one entity is deemed to attain another and there is a new basis of accountingfo

Types of firms in securities firms and investment banking, What are the typ...

What are the types of firms that securities firms and investment banking industry included? Into the USA, the securities firms and investment banking industry comprises several

Enumerate the potential drawbacks of divestment, Potential drawbacks of div...

Potential drawbacks of divestment - There may be some loss of economies of scale. Fixed overheads would have a lower capacity to recover them. - Cash generated may not be

Example on cash flow diagram, (a) A usual cash flow diagram will incorporat...

(a) A usual cash flow diagram will incorporate the following. If you are short the CDO and then you receive a fixed amount at the initial point t o . After that you make paymen

Write Your Message!

Captcha
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