Question: Alejandro makes $ 1 8 0 each week at a part time job as a cashier. He spends his weekly income on gallons of chocolate
Alejandro makes $ each week at a part time job as a cashier. He spends his weekly income on gallons of chocolate milk and boxes of cereal. Gallons of chocolate milk cost $ per gallon and boxes of cereal cost $ per box.
a Graph Alejandro's budget constraint and label it Label boxes of cereal on the axis and gallons of chocolate milk on the axis.
b Alejandro clips a coupon good for free boxes of cereal. Show the effect of this change on Alejandro's budget constraint, labeling it Is Alejandro's opportunity cost constant along the budget constraint? Explain.
c Stores are having a Valentines Day promotion: buy the first boxes of cereal at regular price; and all boxes after the third box are halfoff of the original price Show the effect of this change on Alejandro's budget constraint, labeling it Is Alejandro's opportunity cost constant along the budget constraint? Explain.
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