HW40 - Econ 1 Tang Fall Quarter 2007 Homework 4 Chapter 8...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 1: Tang Fall Quarter 2007 Homework 4: Chapter 8 Due Wednesday November 14, at the beginning of class. Please write your name, PID, and section number/TA name on your homework. 1. Suppose that Marvin is currently consuming 4 apples and 4 bananas. If the price of apples is .25 and Marvin spends $6 on apples and bananas, then what is the price of bananas? 2. Every morning Kristen buys a bagel and a cup of coffee from Peabody’s. At Peabody’s the price of bagels is $2.00 and the price of a cup of coffee is $1.00. a. Assuming that Kristen has $20 to spend on coffee and bagels, sketch her budget constraint, putting coffee on the x-axis and bagels on the y-axis. Clearly label a) the x-intercept, b) the y-intercept, c) and the slope of the budget constraint. b. Now, suppose that Peabody’s wants to encourage customer loyalty. To do so they start the following program: every time someone purchases 10 cups of coffee, they get the 11 th cup for free. Sketch Kristen’s new budget constraint under the assumption that she still has $20 to spend on coffee. As above, put coffee on the x-axis and bagels on the y-axis.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 2

HW40 - Econ 1 Tang Fall Quarter 2007 Homework 4 Chapter 8...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online