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Suppose Lisa initially has income of $80, the price of pizza (pz) is $2.00 per slice, and the price of burritos (Pg) is $4.00
Suppose Lisa initially has income of $80, the price of pizza (pz) is $2.00 per slice, and the price of burritos (Pg) is $4.00 per burrito. Her budget line (L') is illustrated in the figure to the right. Suppose Lisa's budget and the price of pizza double, but the price of burritos remains constant. Show how her budget constraint and opportunity set changes. Is Lisa necessarily better off than before these changes? (Hint: What happens to the intercepts of the budget line?) 1.) Using the line drawing tool, graph Lisa's new budget constraint. Label this line 2: 2.) Using the triangle drawing tool, shade in Lisa's opportunity set. Label this 'OS." Carefully follow the instructions above, and only draw the required objects. CEL 8. Burritos per semester 100- 90- 80- 70- 50- 40 30- 20 10- 0 0 10 20 30 40 50 60 70 Z. Pizzas per semester 80 90 100
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With original prices and budget Lisa was able to consume 802 40 Pizzas x intercept 802 40 Burri...Get Instant Access to Expert-Tailored Solutions
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