Managerial Economics

Would you please help me?

1. For you, give one (1) assumption of consumer theory and relate it to your real-life experiences as a consumer.
2. How does the budget constraint affect consumer choices?

3. Michelle and Janice are both consumers of burgers and fries, but Michelle has P800 and Janice has P400.

• Draw the possible budget lines for both persons. Use the prices of burgers and fries in the discussion.
• Explain how the difference in their budget would affect the following:
  • Their behavior in making choices. Who will have more freedom of choice and why?
  • Their level of satisfaction for the goods. Who will have more utility and why?