A community for students.

Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing

jennychan12

  • one year ago

Economics budget line help!! Question is below :)

  • This Question is Open
  1. jennychan12
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    Jack 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.

  2. anonymous
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    Jack 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|

  3. anonymous
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    Next, begin the analysis the same way except now we have some new information: the first 5 bars have a lower price--so we know that there will be a "kink" in the budget line.

  4. anonymous
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    How 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.

  5. anonymous
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    |dw:1435311695397:dw|

  6. anonymous
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    How 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).

  7. anonymous
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    The drawing doesn't show the kink very well, sorry

  8. anonymous
    • one year ago
    Best Response
    You've already chosen the best response.
    Medals 0

    Anyway, keep doing the same thing for the rest of the problem, should be easy.

  9. Not the answer you are looking for?
    Search for more explanations.

    • Attachments:

Ask your own question

Sign Up
Find more explanations on OpenStudy
Privacy Policy

Your question is ready. Sign up for free to start getting answers.

spraguer (Moderator)
5 → View Detailed Profile

is replying to Can someone tell me what button the professor is hitting...

23

  • Teamwork 19 Teammate
  • Problem Solving 19 Hero
  • You have blocked this person.
  • ✔ You're a fan Checking fan status...

Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.

This is the testimonial you wrote.
You haven't written a testimonial for Owlfred.