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jennychan12
 one year ago
Economics budget line help!! Question is below :)
jennychan12
 one year ago
Economics budget line help!! Question is below :)

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jennychan12
 one year ago
Best ResponseYou've already chosen the best response.0Jack has $50 in his wallet. A candy bar costs $2, and an energy drink costs $4. Draw his budget line. i) Suppose the store has a discount on candy bars. The first five candy bars sell for $1 each. Any additional candy bars will be the original price. What will be Jack's new budget line? Compare it with his original. ii) The store now has a promotion on energy drinks. After purchasing 2 cans of energy drink, the store will give a $1 discount on any additional energy drinks. What will be his new budget line? Compare it with the original.

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0Jack has $50. How many candy bars can Jack buy with $50 if he only buys candy bars? He can buy 25 bars, because each costs $2. (50/2 = 25) Alternatively, how many energy drinks can Jack buy if he only buys energy drinks? He can buy 12.5, because each energy drink costs $4. (50/4 = 12.5) dw:1435311184806:dw dw:1435311278822:dw

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0Next, begin the analysis the same way except now we have some new information: the first 5 bars have a lower priceso we know that there will be a "kink" in the budget line.

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0How many bars can Jack buy now, if the first 5 only cost $1, but after that bars cost $2. He can buy 5 bars for $1. This leaves us with $45. How many bars can he buy with $45 if each costs $2... He can buy 45/2 = 22.5 more bars. So the maximum is the first 5 plus the next 22.5, or 27.5 total.

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0dw:1435311695397:dw

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0How many drinks can Jack buy if he buys 5 candy bars at $1 each? He has $45 to spend on drinks in that case, and 45/4 = 11.25, so the kink is at the position (x, y) = (11.25, 5).

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0The drawing doesn't show the kink very well, sorry

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0Anyway, keep doing the same thing for the rest of the problem, should be easy.
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