Tuesday

July 22, 2014

July 22, 2014

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

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 9:47amTake 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 8:43pmSorry 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 8:44pmTo be more clear, (20,0) to (7,0)

- Microeconomics: Budjet Constraint -

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