Question
Antonio buys three new college textbooks during his first year at school at a cost of $100 each. Used books cost only $50 each. Antonio's
Antonio buys three new college textbooks during his first year at school at a cost of $100 each. Used books cost only $50 each. Antonio's income available to spend on books is $300. Plot Antonio's original budget constraint with the new books on the vertical axis. Illustrate how it is affected by the changes below:
3.1. Bookstore announces that there will be a 50% increase in the price of new books and a 20% increase in the price of used books.
3.2. Textbook prices have not changed, but Antonio's father offers him $100 extra. 3.3. Bookstore announces that there will be a 50% increase in the price of new books and a 20% increase in the price of used books; additionally, Antonio's father offers him $150 extra. Is Antonio better or worse off after this price change? Explain.
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