ASSIGNMENT: BUDGET CONSTRAINT AND INDIFFERENCE CURVES 1. (15 points) Answer the following questions based on the...

 

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ASSIGNMENT: BUDGET CONSTRAINT AND INDIFFERENCE CURVES 1. (15 points) Answer the following questions based on the information in Table 1. A consumer is able to consume the following bundles of rice and beans when the price of rice is $2 and the price of beans is $3. a. How much is this consumer's income? Table 1. RICE 12 6 0 BEANS 0 4 8 b. Draw a budget constraint given this information. Label it B. c. Construct a new budget constraint showing the change if the price of rice falls $1. Label this C. d. Given the original prices for rice ($2) and beans ($3), construct a new budget constraint if this consumer's income increased to $48. Label this D. ASSIGNMENT: BUDGET CONSTRAINT AND INDIFFERENCE CURVES 1. (15 points) Answer the following questions based on the information in Table 1. A consumer is able to consume the following bundles of rice and beans when the price of rice is $2 and the price of beans is $3. a. How much is this consumer's income? Table 1. RICE 12 6 0 BEANS 0 4 8 b. Draw a budget constraint given this information. Label it B. c. Construct a new budget constraint showing the change if the price of rice falls $1. Label this C. d. Given the original prices for rice ($2) and beans ($3), construct a new budget constraint if this consumer's income increased to $48. Label this D.

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1 Price of rice RICE 12 6 a 2 and Price Consumer is able to cons... View the full answer