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Unformatted text preview: Problem Set #1 (due Friday, Jan 23) Ec 201 Spring, 2009 Michigan State University L. Martin 1. Budget constraint. Barbara has $150 to spend on books and phone calls. Each book costs $15 and a typical phone call costs her $5. a. Draw her budget constraint. b. What is its slope? c. Explain the economic significance of the slope. d. Suppose that both prices double and that her spending money also doubles. e. Draw her new budget constraint. 2. Time constraint. Sam Smudge is looking for corruption in the State government. His editor has given him 40 hours to search. He can audit travel reports, which take 1 hours each to has given him 40 hours to search....
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This note was uploaded on 10/17/2011 for the course EC 201 taught by Professor Haider during the Spring '10 term at Michigan State University.
- Spring '10