1.The Consumers Budget Lines: See text pages 9 and 10, 13^th. Edition, or pages 10 and 11, 14^th. Edition). Suppose you won $36 on a Lotto Canada ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts.The price of candy bars is $3.00 and the price of peanuts is $6.00. 20 Marks Total

a.Calculate 6 combinations of candies and peanuts you may purchase with $36 and Construct a table as shown below showing the alternative combinations of the two products that are available, i.e. the trade-offs. Check to make sure you send the $36 in each combination.

Consumption Table: Calculate 6 Alternative combinations. Plot these combinations.

Goods

A

B

C

D

E

F

Candy bars "Y" axis(Vertical)

0

2

4

6

8

12

Bags of peanuts "X" Axis (Horizontal)

6

5

4

3

2

0

b.Using the 6 combinations points above, carefully plot a graph with "Y" axis and "X" axis, and clearly label each point on the graph (e.g. A, B,... as per your table). Connect the points as straight line. Show it as a budget line on a graph.Show the area that is attainable and the area that is unattainable as shown in your textbook. (See Figure 1.1 page 10, 14^th. Edition, page 9, .13^th. Edition).

i.Read about the "Slope of a line" in the Appendix of Chapter 1. What is the value of the slope of the line you have drawn?Is it a positive or a negative slope? 2 Marks

ii.What is the opportunity cost to get one more candy bar? ( You may divide the packages) 2 Marks

iii.What is the opportunity cost to get one more bag of peanuts? 2 Marks

iv.Do these opportunity costs rise, fall, or remain constant as each additional unit of the product is purchased? 2 Marks