Suppose:
banana price = p1 = 0.8
plum price = p2 = 0.2
banana quantity = q1
plum quantity = q2
A-
budget constrain
p1.x1 + p2.x2 = 16
B-
q1 = 16/p1 = 16/0.8 = 20
C-
q2 = 16/p2 = 16/0.2 = 80
D-
q1 = 12
Money Spent
p1*q1 = 12.0.8 = 9.6
Funds Left: 16 - 9.6 = 6.4
q2 = 6.4/p2 = 6.4/0.2 = 32
E-
q1=11
Money Spent
p1*q1 = 11.0.8 = 8.8
Funds Left: 16 - 8.8 = 7.2
q2 = 7.2/p2 = 7.2/0.2 = 36
More 4 plums
F-
I don't know this term, relinquishedâ€¦ I
G-
Opp Cost of Bananas = How many plums she has to relinquish to buy one more plum?
Using all her budget, she can have:
Only buys bananas: q1= 20, q2=0
Only buys plums : q1=0, q2=80
Opp Cost of bananas in terms of plums: 0-20/80-0= - 0.25
She has to abdicate of 0.25 bananas to buy one more plum.
H-
Opp Cost of Plums = How many bananas she has to relinquish to buy one more banana?
Using all her budget, she can have:
Only buys bananas: q1= 20, q2=0
Only buys plums : q1=0, q2=80
Opp Cost of plums in terms of bananas: 0-80/20-0= - 4
She has to abdicate of 4 plums to buy one more banana.
I-
Easy