After careful scrutiny Robbin budgets 12week for Wings

After careful scrutiny, Robbin budgets $12/week for Wings ‘n’ Suds. Consider the following: a. Graph and label the axes to show much of each good Robbin is able to buy, if the price of buffalo wing is $0. 50, while the price of Coca-Cola is $1. 50. b. In order to attract more customers to Wings ‘n’ Suds , management decides to lower the price of Coca-Cola to a buck. Show what happens to Robbin’s budget line compared to (a). c. Instead of (b), assume there is a sudden shortage of buffalo wings available. Now, Wings ‘n’ Suds has to raise the price of a wing to $3. Show this event changes Robbin’s budget line relative to (a). d. Robbin, after winning $1, 000 in the Texas lottery, decides that she can now spend $36/week at Wings ‘n’ Suds. Show this event changes Robbin’s budget line relative to (a). e. What combination of wings and Coca-Cola should Robbin buy

Suppose that a college student can spend $50 on entertainment. This student derives satisfaction only from watching movies and playing video games. The price of a movie is $5 and the price of a video game is $2. a. Draw the correct budget line for this student. b. Label the axis. c. Provide the numerical amounts of movies and video games at the “extreme points. ”

Betty and Wilma wish to buy T-shirts and shoes. Betty has a budget of $600, while Wilma has a budget of $1, 200. using the indifference curve analyses given in the following, determine prices fro the T-shirts and shoes. For which commodity can you derive a demand curve? Derive this curve for Betty and Wilma. Finally, derive the market demand curve, assuming that they are the only consumers. Quantity of T-shirts Pairs of Shoes Price of T-shirts Price of Shoes Betty Wilma continued. . .

continued. . .

Betty Wilma Market

Assume that for a given consumer, the marginal utility of Dreyer’s Ice Cream is 120, and the price of Dreyer’s is $4 per gallon. Also, assume that the marginal utility of Blue Bell Ice cream is 160, and the price of Blue Bell is $5 per gallon. This consumer a. is in equilibrium. b. should buy more Blue Bell. c. should buy more Dreyer’s. d. can’t tell; insufficient information.

Derive separate Engel curves for products A and B from the following indifference curve analysis. Assume PA = $1. 50 and PB = $2. 25. Are these goods normal or inferior? Point Quantity of A Quantity of B Income D E F Engel Curve for Product A Engel Curve for Product B continued. . .

QA E F D QB