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4. Sloan and Lyra are both avid gamers, and they both have an annual budget of $360 to spend on video games. There are
4. Sloan and Lyra are both avid gamers, and they both have an annual budget of $360 to spend on video games. There are two kinds of video game, those sponsored by an organization called Mega Games (X) and All Others (Y). The price of a game from Mega Games is $60/game and the price of all other games is $30/game. a. Show the budget constraint. Label it BCo. 15 All Other Games HENR900 C. 14 13 12 11 654 m 3 210 ~ 3 4 Mega Games Mega Games allows you to join a Super Gamer Tier. For an annual fee, $60, the price of each video game is half of the original price ($30). In other words, once you have paid Mega Games $60, the price of all video games from Mega Games is $30. Everyone is eligible to join the Super Gamer Tier if they pay the fee, and the reduced price is only available to tier members. 5 b. Draw this budget constraint and label it BC. (hints: What are the endpoints of the BC? What does paying the fee do to income? What does the price change from $60 to $30 do to the slope?) Write the equation(s) for the new budget constraint. e. If Sloan really likes Mega Games, would he want to join Super Gamer Tier? Explain. g. If Lyra really likes All Other Games, would she want to join Super Gamer Tier? Explain.
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