Eliza has $300 of income. The price of pears is $2 each. The price of almonds...

Transcribed Image Text:

Eliza has $300 of income. The price of pears is $2 each. The price of almonds is $1 each. Show her budget constraint. What is the opportunity cost of pears in terms of almonds? 2. Kit has income of $1,000. (a) Sketch Kit's budget line if the price of muffins is $5 and the price of cookies is $10. (b) What is the slope of this budget constraint? (c) What is the opportunity cost of a muffin in terms of cookies? 3. Jamie's production possibility frontier is sketched below, to the left. Rumi's is sketched on the right. Market Goods ($) 50 Jamie's PPF 80 Home Goods ($) Market Goods ($) 90 Rumi's PPF 30 Home Goods ($) a. How much must Jamie forgo in dollars of home goods in order to get an additional dollar of market goods? b. What is the opportunity cost of market goods for Jamie? c. How much must Rumi forgo in dollars of home good to get an additional dollar of market goods? d. What is the opportunity cost of market goods for Rumi? e. What is the opportunity cost of home goods for Rumi? Eliza has $300 of income. The price of pears is $2 each. The price of almonds is $1 each. Show her budget constraint. What is the opportunity cost of pears in terms of almonds? 2. Kit has income of $1,000. (a) Sketch Kit's budget line if the price of muffins is $5 and the price of cookies is $10. (b) What is the slope of this budget constraint? (c) What is the opportunity cost of a muffin in terms of cookies? 3. Jamie's production possibility frontier is sketched below, to the left. Rumi's is sketched on the right. Market Goods ($) 50 Jamie's PPF 80 Home Goods ($) Market Goods ($) 90 Rumi's PPF 30 Home Goods ($) a. How much must Jamie forgo in dollars of home goods in order to get an additional dollar of market goods? b. What is the opportunity cost of market goods for Jamie? c. How much must Rumi forgo in dollars of home good to get an additional dollar of market goods? d. What is the opportunity cost of market goods for Rumi? e. What is the opportunity cost of home goods for Rumi?

Answer rating: 100% (QA)

1 Elizas Budget constraint and oppurtunity cost i Eliza has 300 of income The price of pears is 2 each and the price of almonds is 1 each To show her ... View the full answer