Essay
Hira likes to shop at Beach Books, where a book is priced at $10. She also likes to shop at Busy Beans, where a latte is priced at $5. Hira has an income of $60.
a. Graph Hira's budget constraint, placing books on the x-axis and lattes on the y-axis.
b. Suppose that Hira's grandmother gives her a cash gift of $20. Graph Hira's budget constraint.
c. Now, suppose that in lieu of the cash gift of $20, Hira's grandmother gives her a $20 gift card to Busy Beans. Graph Hira's budget constraint.
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a. and
b. 
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Correct Answer:
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b.
Original budget co...View Answer
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