Homework Help: Microeconomics: Budjet Constraint

Posted by Johnson on Thursday, August 6, 2009 at 9:44pm.

You have decided to eat sushi for lunch and have a grand total of $20 to spend.
Whatever money you have left over from buying sushi rolls will be spent on cans of soda to get you through the rest of the day. Your problem is to choose the best combination of sushi rolls and cans of soda. A sushi roll (R) is $6 and cans of soda (C) are $1.

Now suppose that you decided to go to the buffet at Fuji Chef instead. The buffet costs $13. Sketch your new budget constraint. (Hint: your possible consumption bundles still consist of cans of soda and rolls of sushi.)

Microeconomics: Budjet Constraint - economyst, Friday, August 7, 2009 at 9:47am
Take a shot, what do you think.
First two assumptions. I presume you cannot by fractional sushi rolls or cans of soda. So, hint: your first budget constraint will look like steps.
Second, I presume at the buffet, you can eat all the sushi rolls you want, and soda is not included. Here, hint: the budget constraint is a vertical line (or horizontal, depending on which axis has soda and which as sushi)
Microeconomics: Budjet Constraint - Johnson, Friday, August 7, 2009 at 8:43pm
Sorry I should have said that fractional sushi rolls and cans of soda are possible. What I was thinking was, with soda on the vertical axis and sushi on the horizontal axis, we have a horizontal
line at $7 on the vertical axis. So basically a straight line down at (20,0) till 7, then a horizontal line.
- Microeconomics: Budjet Constraint - Johnson, Friday, August 7, 2009 at 8:44pm
  To be more clear, (20,0) to (7,0)

Answer this Question

Related Questions

English - Thank you very much for your last corrections. Here are some more ...
English - Thank you very, very much for your help. Which of the following ...
MATH - You have $110 IN YOUR lunch account and plan to spend $2.75 each school ...
Math - Which of the following statement is the contrapositive of (1) ."If I...
math - Jen spends half his money on lunch and then spends $1.50 for a magazine...
math - Jen spends half his money on lunch and then spends $1.50 for a magazine. ...
math - Jen spends half his money on lunch and then spends $1.50 for a magazine. ...
math - You are taking your friend to lunch and have exactly 15 dollars to spend...
English II - How does the author support her view that the lunch period at ...
pre-algebra - zi drive 420 miles to visit her sister. after she had diven one-...

For Further Reading

First Name:
School Subject:
Answer: