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

Compute the economic order quantity, Q. Compute the economic order quantity...

Q. Compute the economic order quantity? TNG has a current order size of 50000 units Average number of orders per year = demand/order size = 255380/50000 = 5·11 orders Ann

Definition of cost of capital, Definition of cost of capital In analyzi...

Definition of cost of capital In analyzing the cost of capital it is presumed that business risk of the firm remains unchanged (i.e., that projects accepted don't affect the va

Define advantages for a firm to cross list its equity shares, Discuss any a...

Discuss any advantages you can think of for a company to (1) cross-list its equity shares on much more than one national exchange, (2) To source new equity capital fro

Define discounting the cash flows in the apv model, What is the intuition o...

What is the intuition of discounting the several cash flows in the APV model at fixed discount rates? The APV model is a value-additivity method where total value is defined by t

Define working capital, What is working capital? Working capital contains...

What is working capital? Working capital contains the current assets of the firm.

Beta, what is the value of beta for this fund ? If the benchmark index for ...

what is the value of beta for this fund ? If the benchmark index for this mutual fund increased by 11.00% during the period covered by beta measure, what was the rate of return for

What are the objectives or goals of financial management, What are the Obje...

What are the Objectives or goals of Financial Management? Objectives of Financial Management: - It is the responsibility of the top management to lay down the objectives or goa

What is the difference between ias 14 and ifrs 8, Differences between IAS 1...

Differences between IAS 14 and IFRS 8 IFRS 8 requires identification of operating segments based on internal reports which are regularly reviewed by management for decision

Functions of derivatives market, Functions of Derivatives Market: To re...

Functions of Derivatives Market: To reduce risk or eliminate risks some ways and methods are there. Risk in the capital market can be reduced by diversification or putting eggs

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