Assume that you have a budget of 30 to spend on milk and, Ask an Expert

Economics

Assume that you have a budget of $30 to spend on milk and cereal only. The price of milk is

Pm=$6 and the price of cereal is Pc=$5.

Answer the following questions.

a. Graph the budget constraint. Be sure to put the quantity of (Qm) on the horizontal axis.

b. What is the most you can purchase of cereal?

c. If you purchase 5 units of cereal (Qc=5), then how many of milk can you purchase at most?

d. What is the slope of the budget constraint? (Note: it is important that you answer Question (a) correctly and put Qm on the horizontal axis).

e. What is the opportunity cost of three units of cereal?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91520800

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