1) Assume the following is the Budget Equation for a consumer: 19 Tequila + 30 Vodka...

1) Assume the following is the Budget Equation for a consumer:

19 Tequila + 30 Vodka = 6,931

What would be the intercept of the budget line on the Tequila axis?

2) Jonny only consumes beer and weed. A beer is $6 and an ounce of weed is $5. Jonny's budget is $2,807 a month. If you the expression of his budget line equation is Weed = H + V Beer, what would be the value of V? (hint: be careful with the signs)

3) A consumer spends his income between pizza and beer. The intercept of the budget line on the pizza axis is 636, the intercept of the budget line on the beer axis is 646 and the price beer is 53. What is the consumer's income?

Expert Solution

The objective of the following analysis is to evaluate the budget constraint.

Rahul Sunny answered 2 years ago

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