Lord Vi Probler 5Mic X 7- Crowdr * Homev P 13 Is T = Chapte P ECO 10|P ECO 10 | Untitled S Micros W answer [ Mail - G budget + V X -) @ File | C:/Users/Komal/Downloads/ECO101_ProblemSet_1.pdf BOK . .. : Apps Home - Mindomo & Money-and-Youth-... Money & Youth Notes on Inclined P. G Quote Analysis-Th... @ How to Add, Duplic... MLA Headings and... G star method - Goog... Microsoft Word - ECO101_ProblemSet_1.docx 1 / 3 78% + Suppose that there is a household with an income of $200. They are considering buying clothes (C) and Food (F). We are going to abstract away from different types of clothes and food, and just think of them as amorphous units, with a price per unit within each category. The price of clothes (pc) is $25 per unit and the price of food (pr) is $5 per unit. 1. Draw the budget constraint for this household. For full credit, be sure to label the y- intercept and x-intercept. Draw this with food on the x-axis and clothes on the y-axis. [2 points] 2. What is the slope of this budget constraint? (1 point] Hint: This slope should be negative. Suppose that they are considering buying three bundles of goods. 3. For each of the following bundle, state whether they are affordable or not affordable and how you know: [3 points] 3.1. Bundle 1: 6 units of Clothes and 20 units of Food. 3.2. Bundle 2: 2 units of Clothes and 30 units of Food. 3.3. Bundle 3: 4 units of Clothes and 20 units of Food. Finally, one way that governments (try to) help low-income families maintain a minimum level of nutrition is through the idea of Food Stamps. Food stamps act as a coupon that can only be spent on food. Suppose that this household receives an additional $100 in food stamps - that once again may only be spent on food 2 4. Draw the new budget constraint for this household. As before, draw this with food on the x- axis and clothes on the y-axis and label the y-intercept, x-intercept, and any kinks. [3 points] 5. What is the slope of this new budget constraint (BC)? [1 point] - Note: if the slope is different on different parts of the BC, tell us what the slope is on each different part of the BC. 3 O P 14 C A D ( ENG 2:40 PM Type here to search 2022-09-23 L