Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rabia the representative consumer is shopping for Valentine's candy to share with her friends. For the Love of Chocolate, her local candy story in Carytown,

Rabia the representative consumer is shopping for Valentine's candy to share with her friends. For the Love of Chocolate, her local candy story in Carytown, is selling heart-shaped lollipops for $3 each, and chocolate truffles for $2 each. We'll use the the letter c to denote the number of chocolate truffles, and the letter l for the number of lollipop

a) Suppose Rabia has $72 to spend on candy. create an equation for her budget constraint, and arrange it into slope-intercept form with c as the dependent variable and l as the independent variable. Then graph the budget constraint with c on the vertical axis and lon the horizontal axis. Be sure to label the axes, intercepts, and slope.

(b) Suppose Rabia spends $6 on a Valentine card for her best friend, leaving her with $66 to spend on candy. Draw a graph of Rabia's new budget constraint, again making sure to label the axes, intercepts, and slope. In a few sentences describe what happens to the slope and each of the intercepts? Do they change? Why or why not?

c) Suppose the candy story has a sale on heart-shaped lollipops, so they are now $2 each. Rabia still has $66 available to spend and the price of chocolate truffles is unchanged at $2 each. Draw a graph of Rabia's new budget constraint, again making sure to label the axes, intercepts, and slope. In a few sentences describe what happens to the slope and each of the intercepts? Do they change? Why or why not?

(d) Suppose Rabia gets a gift certificate for a dozen (12) free chocolate truffles. Draw a graph of Rabia's new budget constraint, again making sure to label the axes, intercepts, and slope. In a few sentences describe what happens to the slope and each of the intercepts? Do they change? Why or why not

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics A Problem-Solving Approach

Authors: Luke M. Froeb, Brain T. Mccann

2nd Edition

B00BTM8FK0

More Books

Students also viewed these Economics questions