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Unformatted text preview: the quantities of each good consumed. 4. Now consider the following situation: Brenda’s income doubled, the price of hot dog doubled, and the price of coke stayed the same. Write down her new budget equation. Draw another budget line, and label the points where the budget line hits the axes and write down the quantities of each good consumed. 5. Bonus Question: Now let’s go back to the situation in 3. In addition, Coke offers a special discount of $.20 per bottle after the first 12 bottles of Coke. For example, if Brenda buys 20 bottles of coke, she will need to pay $.50*12+($.50$.20)*7. Draw another budget line, and label the points where the budget line hits the axes and the point where it has a kink. Write down the quantities of each good consumed at all these points....
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This note was uploaded on 01/26/2010 for the course ECONOMICS EC212 taught by Professor Yu during the Spring '08 term at Mt. Holyoke.
 Spring '08
 Yu

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