Essay
Sherry is on vacation and wants to bring souvenirs home to family and friends.Her souvenir budget is $100,and she can choose between T-shirts,which cost $20 each,and key chains,which cost $5 each.
a.Draw a graph of Sherry's budget line in the figure below.
b.What is the slope of Sherry's budget line? How does that slope represent an opportunity cost? Suppose that Sherry now finds a store where T-shirts are on sale for $10 each.(Key chains still cost $5 each).
c.Draw the new budget line in the figure.
d.What is the slope of the new budget line? How has the opportunity cost changed?
Correct Answer:
Verified
a.The budget line is in the figure abo...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
a.The budget line is in the figure abo...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q73: You are studying with a friend and
Q150: If the price of steak rises,a consumer
Q152: If a consumer has allocated his or
Q153: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB1458/.jpg" alt=" -The above table
Q156: Which of the following is the best
Q157: An indifference curve shows<br>A) utility maximizing levels
Q158: If a consumer's marginal rate of substitution
Q159: When Bo is at his best affordable
Q160: If Bill's income increases from $30,000 per
Q183: "Because the price of a diamond is