Question: 1 Buy Two, Get One Free! a. Suppose a consumer has $6 and can spend their money on pounds of cottage cheese and pounds of

 1 Buy Two, Get One Free! a. Suppose a consumer has

1 Buy Two, Get One Free! a. Suppose a consumer has $6 and can spend their money on pounds of cottage cheese and pounds of oatmeal. Cottage cheese in $2 per pound and oatmeal is $1 per pound. Both items are bought in continuous quantities. On the axes above, graph the consumers budget constraint for cottage cheese and oatmeal. Provide all the necessary information on the graph. b. Suppose the store decides to give away 1 pound of cottage cheese for every 2 pounds of cottage cheese the consumer buys. If a consumer pays for 1.9 pounds of cottage cheese, they would leave the store with 1.9 pounds of cottage cheese. But if the consumer pays for 2.3 pounds of cottage cheese, the consumer would leave the store with 3.3 pounds of cottage cheese. On the same axes above, graph the new budget constraint. Make sure to distinguish which budget constraint is which

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
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 Accounting Questions!