Question: On your graph for problem 5, draw the new budget constraint that results if the price of soccer balls increases to $25 and the price

On your graph for problem 5, draw the new budget constraint that results if the price of soccer balls increases to $25 and the price of socks remains $5 per pair. Shade the area on your graph that represents all the combinations of the two goods that you could afford after the price change.

Data from problem 5

Suppose this weekend you’re going to the sporting goods store to spend a $75 gift certificate on some combination of $15 soccer balls and $5 pairs of socks. Draw your budget constraint, with the quantity of pairs of socks shown on the horizontal axis and the quantity of soccer balls shown on the vertical axis. Draw dotted lines to both axes from each point to indicate the quantity of each good represented by each point on your budget constraint.

Step by Step Solution

★★★★★

3.44 Rating (157 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To draw the new budget constraint after the price change we will assume that the original budget con... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Macroeconomics Principles Questions!

Suppose this weekend youre going to the sporting goods store to spend a $75 gift certificate on some combination of $15 soccer balls and $5 pairs of socks. Draw your budget constraint, with the...

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

2.3 After paying for rent and other necessities Emma has a budget (I) of 100 kronor each week that she can choose how to allocate between food (F) and entertainment (E). Assume that the price of F (P...

MACROECONOMICS (TEXTBOOK USED IS ECONOMICS FOR SOUTH AFRICAN STUDENTS FIFTH EDITION PHILIP MOHR AND ASSOCIATES) To round off this section, we illustrate the benefits of an FIGURE 19-6 An increase in...

MACROECONOMICS To round off this section, we illustrate the benefits of an FIGURE 19-6 An increase in productivity without any increase in remuneration increase in productivity without any...

Problem 01. 1. In this problem, you are asked to consider cases in which "more is not better." For each of the following scenarios, draw an appropriate indifference curve map over different...

. Richard and Mary Johnson have fallen on hard times, but remain rational consumers. They are making do on $100 a week. Food (x) costs $2 per unit. Draw a budget line for the couple on the (x, y)...

Question 1 0 out of 2.5 points Assume that the price of commodityA is $20, the price of commodity B is $10, and that the consumer is currently spending all available income. At the consumer's current...

!Help me please. (e) Revolution comes, and all taxes and subsidies are abolished. Even better, the consumer finds a new shop that offers bulk discounts. In this shop, footballs cost $4 each if you...

What are the two chief limitations of ABC?

+ The following are statements of financial position as at 31 December 20X7: Pascal Bhd. (RM) Assets Non-current assets: Property, plant and equipment Investments in Saville Sdn. Bhd: 720,00 units...

Match the following definitions with their terms. ( Not all terms may be used. ) Definition Term Something about which information is stored Used to record infrequent or nonroutine transactions...

What are three things you can do to create a culture of civility and candor in the workplace? Explain

How can cartels sow the seeds of their own destruction?

A monopolistically competitive market is characterized by: a. Many small sellers selling a differentiated product. b. A single seller of a product that has few suitable substitutes. c. Very strong...

What kind of agreements may cartels work out to reduce competition among themselves?

On January 2, 2019, Kangaroo Convenience Stores issued 10-year, $5,000,000, zero-coupon bonds at 75. What is the amount of interest expense recorded in 2019 using the straight line amortization...

2. Loblaw Manufacturing has asked you to create a cash budget in order to determine its borrowing needs for the June to October period. You have gathered the following information. April and May...

[The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $17,000 cash by...