HW1 - PAM 2000 - Intermediate Microeconomics Homework...

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PAM 2000 - Intermediate Microeconomics Homework Assignment #1 You are permitted to work in small groups, but you must hand in individual answers.  The assignment is due at the start of class on Tuesday, February 10.   No make-up  assignment will be provided, and late homework will receive a grade of zero.   On  questions   indicated   “TFU   and   explain:”   you   must   indicate   whether   the   following  statement is True, False, or Uncertain, and explain your economic reasoning.  All points  will be earned based on the soundness of your reasoning. 1. Blair has $20 to spend on Vegetables or Meat.  The price of Vegetables is $0.25/ Vegetable and the price of Meat is $4/Meat. a. What is Blair’s mathematical budget constraint? b. Draw Blair’s budget constraint with Vegetables on the Y-axis and Meat on  the X-axis.   Clearly label the two intercepts and the slope (including  units). c. What is Blair’s opportunity cost of Vegetables and Meat (again you must  include the units)? d. What is Blair’s income, measured in units of Vegetables? e. Cara has $40 to spend on Vegetables or Meat; Cara faces the same prices  as does Blair.  What is Cara’s opportunity cost of Vegetables and Meat? 2. TFU and explain:  The more Meat that is purchased at the expense of Vegetables,  the larger will be the opportunity cost of the next unit of Meat. 3.
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This note was uploaded on 02/25/2009 for the course PAM 200 taught by Professor Unur during the Summer '08 term at Cornell.

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HW1 - PAM 2000 - Intermediate Microeconomics Homework...

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