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Susan Has $10 to Spend on Soda and Candy Bars

Question 105

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Susan has $10 to spend on soda and candy bars.Soda costs $1 per bottle and candy bars cost $.50 each.Using the grid below: (Appendix) Susan has $10 to spend on soda and candy bars.Soda costs $1 per bottle and candy bars cost $.50 each.Using the grid below: (Appendix)   (a)Draw Susan's budget constraint. (b)Draw a new budget constraint if the price of soda stays at $1 per bottle but the price of candy bars rises to $1 each. (c)Draw a new budget constraint with the prices at their original levels (soda costs $1 per bottle and candy bars cost $.50 each)but now suppose that on her way to the store to make her purchase Susan loses $5 (she now has only $5 to spend). (a)Draw Susan's budget constraint.
(b)Draw a new budget constraint if the price of soda stays at $1 per bottle but the price of candy bars rises to $1 each.
(c)Draw a new budget constraint with the prices at their original levels (soda costs $1 per bottle and candy bars cost $.50 each)but now suppose that on her way to the store to make her purchase Susan loses $5 (she now has only $5 to spend).

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(a)AA is the budget ...

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