(Answered) You arrive on campus at the beginning of the academic year

Economics

You arrive on campus at the beginning of the academic year with $450 to spend on textbooks and food. The price of a textbook is uniformly $90 and the price of a meal is always $15. Your parents made a deal with you: if you spend $270 of your own money on textbooks, your parents will split the cost of any additional textbooks with you.

a. Draw your budget constraint. Label the y- and x- intercepts. (Put food on x-axis.)

b. At what point does your budget constraint "kink"? What is the slope of the budget constraint to the left and right of the kink point?

c. Draw an indifference map showing that with your parents' subsidy, you buys 5 books and 6 meals, but that without the subsidy, you would have purchased 4 textbooks and 6 meals.

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M92191339
Price:- $15

Verified Expert

Priced at $30 Now at $15, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Business Economics

A group of individuals each face a 1 probability of

A group of individuals each face a 1% probability of suffering a loss of $10,000, a 4% probability of suffering a $1,000 loss, a 20% probability of suffering a $500 loss, and a 75% probability of no loss. What is the act ...

What is the difference between accounting costs and

What is the difference between accounting costs and economic costs? Why do economic costs include both explicit (revealed and expressed) costs and implicit (present but not obvious) costs? What are the differences betwee ...

The number of phone calls that arrive at a phone exchange

The number of phone calls that arrive at a phone exchange is often modeled as a Poisson random variable. Assume that on average there are 7 calls per hour. Show all work. a) Find the probability that there are exactly f ...

Consider a banking model with delegated monitoring markets

Consider a banking model with delegated monitoring. Markets are perfectly competitive. There is a large number of borrowers who lack the funds and a large number of lenders who have the funds. Each lender has 10 goods to ...

Explain a situation using the supply and demand for skilled

Explain a situation using the supply and demand for skilled labor in which the increased number of college graduates leads to depressed wages. Given the rising cost of going to college, explain why a college education wi ...

How the manager use the information supposed the

How the Manager use the information "supposed the macroeconomic forecast predict that the economy will be expanding in the near future" in an organization?

Some economics textbooks refer to the factors of production

Some economics textbooks refer to the factors of production as follows: Land, Labor, Capital, and Entrepreneurship. Why does Peter Klein say that it is inaccurate to include entrepreneurship as one of the factors? Explai ...

When we look at the ease to enter the different market

When we look at the ease to enter the different market structure, there is no doubt that 'monopoly' is the hardest. Why? -- There is only ONE firm that has established 'economies of scale' with the production of their go ...

In one of your classes the syllabus states that hw is worth

In one of your classes the syllabus states that HW is worth 10%,quizzes 20%, test 40% and the final 30%. Your grades on the HW is 80, quizzes 75 and tests 68. What is your current grade in the class? What do you need to ...

Under what circumstances would lras and sras have the same

Under what circumstances would LRAS and SRAS have the same slope?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert