Draw bridgettes budget constraint

Assignment Help Microeconomics
Reference no: EM13849978

Bridgette has an income of $480 which she uses to purchase only two goods: CDs and mystery novels. The price of a CD, PCD is $10, and the price of a mystery novel, PMN is $12. Assume all indifference curves have the normal "bowed" shape.

a. Draw Bridgette''s budget constraint, putting mystery novels on the horizontal axis. At her consumer optimum, she buys 30 CDs and 15 mystery novels. Draw an indifference curve that leads to this choice. What is her marginal rate of substitution (MRS) of CDs for mystery novels at this point?

b. Now suppose that PCD rises to $15, PMN rises to $18, and Bridgette''s income rises to $720. How (if at all) will she adjust her consumption of CDs and mystery novels from part (a).

c. Now return to the situation where PCD = $10, PMN = $12, and Income = $480. For a membership fee of $120, Bridgette can join a discount shopping club and buy at the lower prices of PCD = $9 and PMN = $6.

Will Bridgette take this option? Why or why not?

Reference no: EM13849978

Previous Q& A

  What strategies are addressed for the project

Identification of the professional accounting, management and/or public relations issues in your workplace - How do you applied knowledge from this degree study in solving your workplace problems, including appropriate analysis and justification

  Define what is strategic value and competitive advantage

Define what is strategic value and competitive advantage. Identify the value and competitive advantage of POPstation strategy à creating value to customers, explain how expanding on POPstation delivers value to customers

  Identify and treat psychiatric conditions

Analyze controversy within the context of how clinicians ethically identify and treat psychiatric conditions. Be sure to integrate knowledge of any appropriate cultural considerations psychologist must be aware of when diagnosing gender dysphoria.

  Identify a few problems related to your nature of business

Identify a few problems related to your nature of business. Next, select the most important problems or failures to analyse further.

  What is the least-cost combination of labour and capital

What is the least-cost combination of labour and capital to employ in producing 80 units of output? Explain

  Drilling in a normally pressured zone

If you are drilling in a normally pressured zone, what pressure would you expect at 12,000 ft. (TVD) (TVD is True Vertical Depth) (round off to the nearest whole number)

  How does it serve general public to have medical provider

How does it serve the general public to have medical provider outcomes data posted publicly, even though the general population may not know how to interpret the data

  Use molecular orbital theory to predict

Use molecular orbital theory to predict whether the bond order in the superoxide ion, O2-, should be higher or lower than the bond order in neutral O2 molecule.Is the bond order of O2- higer or lower than that of O2?

  Using the information in the t-accounts classified balance

The Prepaid Expense account includes a two-year insurance policy purchased on January1, 2015 for $12,000. Claudia has been properly recognizing insurance expense eachmonth (up through August).

  A particle with the mass of a proton is trapped in a box

A particle with the mass of a proton is trapped in a box. The particle falls from the state to the state and emits 0.16 meV of energy. What is the size of the box?  (nm

Reviews

Write a Review

 

Similar Q& A

  When gdp is high or increases does it indicate higher income

When GDP is high or increases does it indicate higher income If so when GDP per capita increases why do saving ratios decrease when savings is income induced ie a rise in income increases savings and a decrease in income decreases savings

  1 suppose that you have been appointed as an environmental

1. suppose that you have been appointed as an environmental adviser to a government enquiry into shale gas fracking and

  Explain factors that shape wage differentials

Institutional economics, especially applied to metropolitan areas, highlight problems with human capital theory and help us better understand wage differentials. Explain factors that shape wage differentials by metropolitan areas.

  What is that worker''s marginal product

Frank Gunter owns an apple orchard. He employs 40 apple pickers and pays them $7 per hour to pick apples, which he sells for $3.50 per box. If Frank is maximizing profits

  How do local zoning ordinances try to promote land uses

How do local zoning ordinances try to promote land uses that generate external benefits for neighbors Why have authorities found it so difficult to regulate the fishing in the open ocean to allow for a sustainable yield

  What effect would the addition of population growth have

How would population growth effect the dynamically efficient allocation, given the model in question 2 the second period has a higher demand for the depletable resource. What effect would the addition of population growth have on the efficient all..

  What is meant by the market demand for a prodcut

a) What is meant by the Market Demand for a prodcut? Does the market demand curve for a product always slope downward to the right. If your answer is yes, discuss. If your answer is no, discuss.

  What is the optimal per unit tax on pollution

What is the total social cost of pollution when the firm considers only its private costs - what is the optimal per unit tax on pollution for this steel factory. Why?

  Which type of market do individual firms have no incentive

The payoff matrix below shows the payoffs for two coffee manufacturers, Cambridge and Greystone, which are deciding whether to advertise. The blue payoffs show Cambridge's profit for different strategies selected by each firm. The orange payoffs s..

  Find the total surplus

The price at point a is $70 and the price at point c is $10 per bag. The price at point d is $49 and the price at point e is $24 per bag. The price at point f is $48 and the price at point g is $13 per bag.

  Optimum velocity required to minimize the total costs

The cost for operating a commercial truck is kn, where k is a constant of proportionally, v is velocity in miles per hours and n is the trip length in miles. It is estimated that at 85 mph, the average cost of operation is $52 per mile.

  Write the difference between award fee contracts and

identify and define the three categories of compensation arrangements. give examples of specific arrangements in each

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd