5. Hanna has $100 to spend on movies and concerts. Suppose the price of a movie ticket...

Question:

5. Hanna has $100 to spend on movies and concerts. Suppose the price of a movie ticket is $10 and the price of a concert ticket is $50.

a. Create the budget constraint for movie tickets and concert tickets for Hanna.

b. Show the change in the budget constraint that would occur if the price of concert tickets dropped to $40.

c. Show the change in the budget constraint that would occur if the price of movie tickets doubled.

d. Show the change in the budget constraint that would occur if Hanna had $200 rather than $100.

e. Explain why we are not able to determine where on the budget constraint Hanna would choose to consume.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Macroeconomics

ISBN: 9780134492056

2nd Edition

Authors: Daron Acemoglu, David Laibson, John List

Question Posted: