Katarina and Ivanna are sisters and plant lovers and have saved a total of $640 to spend
Question:
Katarina and Ivanna are sisters and plant lovers and have saved a total of $640 to spend on plants for their new apartment in Miami. They have decided to use this money on orchids and ferns. Their original budget constraint is shown in the graph below. Let X represent orchids and Y represent ferns.
a. What is the equation of the original budget constraint?
b. What is the price of an orchid? a fern?
c. Assume a price change occurs and Katarina and Ivanna now face the new budget constraint. What is the equation of the new budget constraint?
d. With the new budget constraint, what is the price of an orchid? a fern?
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a The equation of the original budget constraint can be determined using the intercepts given in the ...View the full answer
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Related Book For 
Mylab Economics With Pearson Access Code For Principles Of Microeconomics
ISBN: 9780135197141,9780135197103
13th Edition
Authors: Karl E. Case; Ray C. Fair; Sharon E. Oster
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