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Please Answer iv)
A student living in a university hostel has two options for meals: eating at the dining hall for Rs.600 per meal, or eating a meal at Dhaaba for Rs.150 per meal. His weekly food budget is Rs. 6000
Draw the budget constraint showing the trade-off between dining-hall meals and meals at Dhaaba. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A.
Suppose the price of a Dhaaba meal now rises to Rs.200. Assume that our student now spends only 30 percent of his income on dining-hall meals. Label the new optimum as point B.
iv) Use points A and B to draw a demand curve for meals at Dhaaba. What is this type of good called?
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- Q. 2 A student living in a university hostel has two options for meals: eating at the dining hall for Rs.600 per meal, or eating a meal at Dhaaba for Rs.150 per meal. His weekly food budget is Rs.6000. i) Draw the budget constraint showing the trade-off between dining-hall meals and meals at Dhaaba. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A. ii) Suppose the price of a Dhaaba meal now rises to Rs.200. Using your diagram from part (a), show the consequences of this change in price. Assume that our student now spends only 30 percent of his income on dining-hall meals. Label the new optimum as point B. iii) What happened to the quantity of meals at Dhaaba consumed as a result of this price change? What does this result say about the income and substitution effects? Explain. iv) Use points A and B to draw a demand curve for meals at Dhaaba. What is this type of good called?A student living in a university hostel has two options for meals: eating at the dining hall for Rs.600 per meal, or eating a meal at Dhaaba for Rs.150 per meal. His weekly food budget is Rs.6000. Draw the budget constraint showing the trade-off between dining-hall meals and meals at Dhaaba. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A. Suppose the price of a Dhaaba meal now rises to Rs.200. Using your diagram from part (a), show the consequences of this change in price. Assume that our student now spends only 30 percent of his income on dining-hall meals. Label the new optimum as point B. What happened to the quantity of meals at Dhaaba consumed as a result of this price change? What does this result say about the income and substitution effects? Explain. Use points A and B to draw a demand curve for meals at Dhaaba. What is this type of good called?Q.2 a) Draw hypothetical consumer’s indifference curves for Soft-drink and Pizza. Describe and explain four properties of these indifference curves. b) A student living in a university hostel has two options for meals: eating at the dining hall for Rs.600 per meal, or eating a meal at Dhaaba for Rs.150 per meal. His weekly food budget is Rs.6000. i) Draw the budget constraint showing the trade-off between dining-hall meals and meals at Dhaaba. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A. ii) Suppose the price of a Dhaaba meal now rises to Rs.200. Using your diagram from part (a), show the consequences of this change in price. Assume that our student now spends only 30 percent of his income on dining-hall meals. Label the new optimum as point B. iii) What happened to the quantity of meals at Dhaaba consumed as a result of this price change? What does this result say about the income and…
- A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O’ Soup for $1.50 per meal. Hisweekly food budget is $60. Draw the budget constraint showing the trade-off between dining hall meals and Cups O’ Soup. Assuming that he spends equal amounts on both goods, draw an indifference curve showing theoptimum choice. Label the optimum as point A.Suppose the price of a Cup O’ Soup now rises to $2. Using your diagram from part (a), show the consequences of this change in price. Assume that our student now spends only 30 percent of his income on dining hall meals. Label the new optimum as point B.Mary has two dinner options available: eating a home cooked meal for $150 per meal, or at a restaurant for $260 per meal. Her weekly budget is $2500. Draw Mary’s budget constraint, (put home cooked meal on the horizontal axis) showing the trade-off between a home cooked meal and eating at a restaurant. Draw an indifference curve showing the optimum choice. Label the optimum as point A. iii. What would be the marginal rate of substitution at the point that corresponds to the optimal consumption choice? Interpret the marginal rate of substitution. Suppose the price of a home cooked meal increases to $200 and income increases to $4200. Show the impact of the new budget line relative to the original budget line. What would be the new marginal rate of substitution that corresponds to the optimal consumption choice? Interpret the marginal rate of substitutionPicture 1 : A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a package of Cup O' Soup for $2 per meal. Her weekly food budget is $60. Assume that she spends equal amounts on both goods. On the following graph, use the green line (triangle symbol) to draw the college student's budget constraint. Then use the black point (plus symbol) to indicate the initial optimum in this case. Picture 2 : Suppose the price of a Cup O' Soup now rises to $3. Assume that the student now spends only 20 percent of her income on dining hall meals. On the preceding graph, use the blue line (circle symbol) to draw the college student's new budget constraint. Then use the grey point (star symbol) to indicate the new optimum in this case. As a result of this price change, the quantity of Cup O' Soup packages consumed ( decreased , increase ) ? This means that Cup O' Soup must be (a normal , an inferior) ? good, and the income effect (…
- A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O’ Soup for $1.50 per meal. His weekly food budget is $60. Draw the budget constraint showing the trade-off between dining hall meals and Cups O’ Soup. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A. Suppose the price of a Cup O’ Soup now rises to $2. Using your diagram from part (a), show the consequences of this change in price. Assume that our student now spends only 30 percent of his income on dining hall meals. Label the new optimum as point B. What happened to the quantity of Cups O’ Soup consumed as a result of this price change? What does this result say about the income and substitution effects? Explain.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. What is the expression for Raymond’s budget constraint? Draw a graph of Raymond’s budget line (meatloaf on the y axis). Show how Raymond’s budget line changes if the price of pineapples increases to $370. 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?Kevin likes going to the ballpark to watch baseball, and he also is fond of going to the theater to listen to the symphony orchestra. The following diagram shows two of Kevin's indifference curves for going to ballgames and symphonies. With Kevin's initial budget constraint (BC1), he chose to go to five symphonies and five baseball games per month (point X). Then his budget constraint shifted to BC2, and he chose to go to four symphonies and four ballgames per month (point Y). BALL GAMES 8 10 I I I I 4 5 SYMPHONIES BC BC B 10 Of the following choices, which could have shifted Kevin's budget constraint from BC₁ to BC2? Check all that apply. The price of symphony tickets increased while his income and the price of baseball tickets stayed the same. His income increased while the prices of baseball and symphony tickets stayed the same. The prices of both baseball and symphony tickets increased while his income stayed the same. His income decreased while the prices of baseball and symphony…
- The budget set, or budget constraint, in the graph shows the possible combinations of brownies and ice cream cones that can be purchased. Assume that this person has a total of $18 to spend on brownies and ice cream cones. How much does a brownie cost? $ Assume that at point A, the marginal utility from a brownie is 10 and the marginal utility for an ice cream cone is 18. This person should consume more brownies and fewer ice cream cones. is utility maximizing. should consume more ice cream cones and fewer brownies.For a rational consumer who has to choose between two goods in the context of budget constraints, the price change of one of the goods, ceteris paribus (i.e the other things remain the same) will determine: Wählen Sie eine Antwort: a parallel shift of the budget line to the right a parallel shift of the budget line to the left a change in the slope of the budget line no change in the budget lineJessie has a budget of $50 and is attempting to draw her budget constraint for purchasing cookies and strawberries. At a maximum, she could consume 100 strawberries; she labels this point on the vertical axis of her budget constraint. If the slope of her budget constraint is -4, what is the price of a cookie?
