Cappuccinos, C, cost $3 each, and music downloads of your favorite artist, M, cost $1 each from
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Question:
Cappuccinos, C, cost $3 each, and music downloads of your favorite artist, M, cost $1 each from your iTunes store. Income is $24.
(a) Draw the budget line, with cappuccinos on the vertical axis, and music on the horizontal axis, and compute the values of the intercepts.
(b) What is the slope of the budget constraint, and what is the opportunity cost of 1 cappuccino?
(c) Are the following combinations of goods in the affordable set: (4C and 9M), (6C and 2M), (3C and 15M)?
(d) Which combination(s) above lie inside the affordable set, and which lie on the boundary?n
Related Book For
Statistics for Business & Economics
ISBN: 978-1337901062
14th edition
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
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