Question
1.Matsumi's budget is $250 per week. She spends all of it on chocolates and peanuts. Chocolates sell for $2 a piece and peanuts sell for
1.Matsumi's budget is $250 per week. She spends all of it on chocolates and peanuts. Chocolates sell for $2 a piece and peanuts sell for $5 a bag. Draw Matsumi's budget constraint (1), then show how it changes for each of the following:
the price of the chocolates increases to $5 a piece, other things equal; (0.5)
the budget increases to $400 per week, other things equal; (0.5)
the prices and the budget remain unchanged, but there are only 40 pieces of chocolate for sale (i.e., Matsumi could buy any quantity not exceeding 40 pieces). (1)
2.Why do economists use Mathematics so much? Explain [give your own opinion]
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