Draw budget constraint - budget line, Financial Accounting

Assignment Help:

You will gain welfare from consuming bread and chocolate. Your welfare is described numerically by W = 4B + 2C, where B denotes the quantity of bread you choose to consume, and C denotes the quantity of chocolate, and W denotes your welfare level.

(a) You have $20 to spend on bread and chocolate. The price of chocolate is $2 per unit, and the price of bread is $1 per unit. Draw your budget constraint, and an indifference curve depicting your welfare level when you optimise. How much chocolate will you buy?

(b) If the price of chocolate increases to $4, does this affect how much chocolate you buy? Does it affect your budget line?  

(c) Given that bread costs $1, how low must the price of chocolate be before you start buying any chocolate?


Related Discussions:- Draw budget constraint - budget line

Draw budget constraint - budget line, You will gain welfare from consuming ...

You will gain welfare from consuming bread and chocolate. Your welfare is described numerically by W = 4B + 2C, where B denotes the quantity of bread you choose to consume, and C d

Differences between estates and trusts-executorship laws, Differences betwe...

Differences between estates and trusts Note particularly the following differences between estates and trusts:— 1. Estate: on the death of a testator or an intestate, all

Taxtomy of intermediaries, Ask quwhats taxtonomy of intermediaries estion #...

Ask quwhats taxtonomy of intermediaries estion #Minimum 100 words accepted#

Managing organisations with multiple objectives, The difficulties associate...

The difficulties associated with managing organisations with multiple objectives To the level that an organisation faces a range of stakeholders then they also face multiple ob

Example of dividend valuation model, Q. Example of Dividend valuation model...

Q. Example of Dividend valuation model? Dividend valuation model D 1 /P +g= 24(1.06)/ 428+ 0·06 = 0·119 or 11·9% An incorrect formula for the dividend evaluation model was u

Ex interest, what is ex interest accounting,uses,types

what is ex interest accounting,uses,types

The principle of revenue, The principle that (1) requires revenue to be re...

The principle that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash and (3

Calculate a volatility smile, I am taking  finance class. Our books is John...

I am taking  finance class. Our books is John C. Hull 2nd edition Risk Management and Financial Institutions.  Our HW  are from this book. I have four questions I need help with.

Calculate the net present value, You are a Senior Financial Manager in the ...

You are a Senior Financial Manager in the recently privatised Sodor Railway Engineering Corporation Plc (SREC). (a) Subsequent to privatisation the Chief Executive Officer of SR

Items reducing the deficit-liquidation of companies, Items reducing the def...

Items reducing the deficit: Items reducing the deficit would include: (a)    Profits from trading; (b)    Estimated profit on the realisation of assets. Notes: (a) Whe

Write Your Message!

Captcha
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