Jacob receives an allowance of $12 per week. He spends all his allowance on ice cream cones and cans of Lemon Fizz soda. When the price of ice cream cones is $0.50 per cone and the price of Lemon Fizz is $1 per can, Jacob faces the budget constraint "BC,'. Suppose the price of ice cream cones rises to $2 per cone Use the line drawing tool to draw in Jacob's new budget constraint. Label this line BC₂¹ Carefully follow the instructions above, and only draw the required objects. Ice cream (number of cones) ***** 22- 20- 18- 16- 14- 124 10- 8 24 AC₁ 9 10 11 12 13 14 Lemon Fizz (number of cans)

Jacob receives an allowance of $12 per week. He spends all his allowance on ice cream cones and cans of Lemon Fizz soda. When the price of ice cream cones is $0.50 per cone and the price of Lemon Fizz is $1 per can, Jacob faces the budget constraint "BC,'. Suppose the price of ice cream cones rises to $2 per cone Use the line drawing tool to draw in Jacob's new budget constraint. Label this line BC₂¹ Carefully follow the instructions above, and only draw the required objects. Ice cream (number of cones) ***** 22- 20- 18- 16- 14- 124 10- 8 24 AC₁ 9 10 11 12 13 14 Lemon Fizz (number of cans)

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 8SQ

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Raymond consumes meatloaves and pineapples. He has decided that his monthly budget will be $1500. Suppose that one meatloaf costs $375, while one pineapple costs $150.a. What is the expression for Raymond’s budget constraint? b. Draw a graph of Raymond’s budget line (meatloaf on the y axis). c. Show how Raymond’s budget line changes if the price of pineapples increases to $370 d. Suppose Raymond decides to cut his monthly budget in half.Coincidentally, the next time he shops, he learns that meatloaves and pineapples are on sale for half price. Show what happens to Raymond’s budget line?
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