During World War II, gasoline sold for a remarkable $0.20 per gallon. Suppose that Rosie works part-time

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During World War II, gasoline sold for a remarkable $0.20 per gallon. Suppose that Rosie works part-time and earns an average of $4 each week to spend on gasoline and food, which costs $0.50 per serving. 

a. Graph Rosie’s budget constraint, putting gasoline on the vertical axis and food on the horizontal axis.

b. During World War II, ordinary citizens were allowed to purchase only 3 gallons of gasoline each week. Show the effects of this quantity restriction on Rosie’s budget constraint.

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Microeconomics

ISBN: 9781319105563

3rd Edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

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