Unformatted text preview: Q2. Shania has $80 that she can spend at the mall on CD’s or mystery novels. In each of the following situations, draw Shania’s budget constraint. Label slope, intercepts and kink point(s) for each question a-e below. (a) The prices of CD’s and mystery novels are $16 and $8 dollars respectively. (b) The price of a mystery novel is $8. However, the music store has a special promotion offering two free CD’s if he purchases one at the regular price of $16. All CD’s purchased afterwards cost $16 each. (c) Shania receives a $16 dollar gift card for the mall that can be used at either the music store or the bookstore. (d) Shaggy receives a coupon good for a 25% discount only on books. (e) The music store offers a promotion such that if you buy 2 CD’s at the regular price of $16, each additional CD purchased only costs $8. The price of mystery novels is still $8....
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- Summer '09
- $16, Detective fiction, $80, $8