Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 1: 9 Marks Ashwin likes to spend her spare time in summer in one of two ways: (i) watching cricket (x) at Sydney Cricket
Question 1: 9 Marks Ashwin likes to spend her spare time in summer in one of two ways: (i) watching cricket (x) at Sydney Cricket Ground or (ii) watching movies (y) at Ritz cinema. In choosing how to entertain herself, she considers both constraints---money and time. Part I (3 marks) Ashwin has 48 hours of spare time in a month. A cricket game runs for 8 hours, while each visit to the movies takes up 4 hours. Each month, Ashwin also has $324 to spend on entertainment. A ticket for a cricket game costs $45. A visit to the movie costs $36. (a) (1 mark) Write down Ashwin's budget constraint and time constraint. (b) (2 marks) Perhaps \"Draw Ashwin's budget constraint and time constraint in a clearly labelled diagram. Label all axis intercepts in the two axes (x and y) and the point of intersection of the two budget lines. Shade the set of bundles that Ashwin can afford (those satisfying both his time and money constraints) with vertical lines." Part III (3 marks) To attract cricket fans back after Covid as well as to cover revenue shortfall, the local cricket association has decided to offer a season ticket for $144. Tickets are now NO LONGER sold separately for each game (i.e., the season ticket is the only option if one wants to watch cricket at SCG). With the season ticket Ashwin can watch as many cricket games as he wants. (c) (1 mark) Draw Ashwin's new budget constraint for money, and shade in his new affordable set of bundles with horizontal lines. (d) (2 marks) Is Sam better off or worse off with the introduction of season ticket? What about Ashwin
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started