1.17. The Japanese Ministry of Internal Affairs and Communications collects data on the prices of goods and services in the Ku-area of Tokyo, as well as data on the average Japanese household’s monthly income. The accompanying table shows some of this data. (¥ denotes the Japanese currency the yen.)

a. For each of the two years for which you have data, what is the maximum number of packs of eggs that an average Japanese household could have consumed each month?
The maximum number of 100-gram portions of tuna? In one diagram, draw the average Japanese household’s budget line in 2003 and in 2005.

b. Calculate the relative price of eggs in terms of tuna for each year. Use the relative price rule to determine how the average household’s consumption of eggs and tuna would have changed between 2003 and 2005.

Transcribed Image Text:

Year Price of Price of tuna Average eggs (per (per 100- monthly pack of 10) gram portion) income 2003 187 392 524,810 2005 231 390 524,585