Rabia the representative consumer is shopping for Valentine's candy to share with her friends. For the Love
Question:
Rabia the representative consumer is shopping for Valentine's candy to share with her friends. For the Love of Chocolate, her local candy story in Carytown, is selling heart-shaped lollipops for $3 each, and chocolate truffles for $2 each. We'll use the the letter c to denote the number of chocolate truffles, and the letter l for the number of lollipop
a) Suppose Rabia has $72 to spend on candy. create an equation for her budget constraint, and arrange it into slope-intercept form with c as the dependent variable and l as the independent variable. Then graph the budget constraint with c on the vertical axis and lon the horizontal axis. Be sure to label the axes, intercepts, and slope.
(b) Suppose Rabia spends $6 on a Valentine card for her best friend, leaving her with $66 to spend on candy. Draw a graph of Rabia's new budget constraint, again making sure to label the axes, intercepts, and slope. In a few sentences describe what happens to the slope and each of the intercepts? Do they change? Why or why not?
c) Suppose the candy story has a sale on heart-shaped lollipops, so they are now $2 each. Rabia still has $66 available to spend and the price of chocolate truffles is unchanged at $2 each. Draw a graph of Rabia's new budget constraint, again making sure to label the axes, intercepts, and slope. In a few sentences describe what happens to the slope and each of the intercepts? Do they change? Why or why not?
(d) Suppose Rabia gets a gift certificate for a dozen (12) free chocolate truffles. Draw a graph of Rabia's new budget constraint, again making sure to label the axes, intercepts, and slope. In a few sentences describe what happens to the slope and each of the intercepts? Do they change? Why or why not