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Jose gets satisfaction from both music (M) and fireworks (F). Jose's income is $240 per week. Jose can buy a song on iTunes for $1,
Jose gets satisfaction from both music (M) and fireworks (F). Jose's income is $240 per week. Jose can buy a song on iTunes for $1, and fireworks cost $8 per bag.
- Write down a mathematical expression of Jose's budget constraint
- Use a graph to illustrate Jose's budget constraint (plot in music (M) in the y-axis and fireworks (F) in the x-axis)
- What is the slope of the budget constraint?
- Suppose that a holiday bonus raises Jose's income temporarily to $360. Use the same graph you drew to represent Jose's new budget constraint.
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