Question
1.Monifa plans to spend her income on concert tickets and movie tickets.Suppose that she has an income of $100.The price of a concert ticket is
1.Monifa plans to spend her income on concert tickets and movie tickets.Suppose that she has an income of $100.The price of a concert ticket is $20, and the price of a movie ticket is $10.
a.Draw and carefully label a budget line diagram illustrating the consumption bundles that she can afford.
b.Can Monifa afford 6 movie tickets and 1 concert ticket? Label this point on your graph.
c.Can she afford 2 movie tickets and 6 concert tickets?Label this point on your graph.
d.Can she afford 4 movie tickets and 3 concert tickets?Label this point on your graph.
e.Which of the combinations above just uses up all her income?
f.Suppose her income rises to $120.Add her new budget line to the previous graph.
g.Next, suppose that her income stays at $100, but the price of concert tickets drops from $20 to $12.50 each.In a new diagram, draw and carefully label both her original and her new budget lines.
h.Can she afford 2 movie tickets and 6 concert tickets after the price drop?
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