Question
John Q. Public spends all of his income on movies and coffee.Draw his budget constraint for these products when the following are true: Graph A:
John Q. Public spends all of his income on movies and coffee.Draw his budget constraint for these products when the following are true:
- Graph A: his income is $150, the cost of a gallon of gas is $3 and a cost of a burger is $5.
- Graph B: his income is $210, the cost of a gallon of gas is $3 and a cost of a burger is $5.
- Graph C: his income is $150, the cost of a gallon of gas is $5 and a cost of a burger is $5.
- Add an indifference map into graph A. How many movies and cups of coffee will he buy to be at equilibrium?
- Add an indifference map into graph B. How many movies and cups of coffee will he buy to be at equilibrium?
- Add an indifference map into graph C. How many movies and cups of coffee will he buy to be at equilibrium?
- Does the equilibrium level of movies and cups of coffee change due to the changes in income and costs?
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Macroeconomics Principles and Applications
Authors: Robert e. hall, marc Lieberman
5th edition
1111397465, 9781439038970, 1439038988, 978-1111397463, 143903897X, 9781439038987, 978-1133265238
