ECO 112 Choice In A World Of Scarcity Monte Carlo Questions 60 60 50 40 40 30 50 20 20 10 0 0 10 20 20 30 40 50 60 A student has a monthly budget of $120 to spend on either burritos, which cost $6 each, or sodas, which cost $4 each. Draw the student's budget constraint. Put burritos on the x-axis and sodas on the y-axis. 1. Answer the following questions for the graph above. (a) What is the largest number of burritos that the student could afford to purchase in one month? (b) Indicate a bundle that is unaffordable by labeling a point 'A.' (c) Indicate a bundle that is inefficient by labeling a point 'B.' (d) What is the equation for the student's budget constraint? In your equation, use B as the variable to represent the quantity of burritos and S to represent the quantity of sodas. 2. Answer the following questions about Josh. Josh has $20 to spend and could buy 40 nails (if he spends all $20 on nails) or 10 bolts (if he spends all $20 on bolts). (a) Write Josh's budget constraint. In your equation, use N as the variable to represent the quantity of nails and B to represent the quantity of bolts. (b) What is the opportunity cost of a nail? (c) What is the opportunity cost of a bolt? (d) How many nails and how many bolts would Josh have if he spends $12 on nails and the remainder on bolts?