Suppose you are given a monthly income of $200 to spend on food while at college. Further,...
Question:
Suppose you are given a monthly income of $200 to spend on food while at college. Further, suppose the price of a single-service pizza is $4 and the price of a deli sandwich is $2.
Which one of the following consumption combinations is possible given these prices and income?
a. 10 pizzas, 100 sandwiches.
b. 20 pizzas, 60 sandwiches.
c. 40 pizzas, 50 sandwiches.
d. 15 pizzas, 80 sandwiches.
Budget Constraint
In economics, each consumer is assumed to have a fixed income, which is why each consumer is constrained in their consumption decisions. A budget constraint therefore shows what combinations of goods that a consumer can buy to exhaust her income.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answer
- The correct answers are: (b) 20 pizzas, 60 sandwiches and (c) 40 pizzas, 50 sandwiches..
Let the number of single-service pizza consumed be...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Budget Constraints: Definition & Formula
from
Chapter 1 / Lesson 6
62K
Learn what budget constraint is and view examples. Understand how to use the budget constraint formula and how to represent a budget constraint using a graph.
Related to this Question
- Suppose a consumer has an income I = $150 which he/she spends on pizza and tacos per month. The price of pizza is $20 and the price of tacos is $10. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month is on
- Suppose a consumer has an income I = $48 which he/she spends on pizza (x) and tacos per month (y). The price of pizza is $8 and the price of tacos is $2. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month i
- When the price of pizza was $10.00 for a medium pizza, students at a college consumed 400 pizzas per week. When the price of pizza increased to $30.00 for a medium pizza, students at a college consumed 100 pizzas per week. a. Calculate the price elastici
- Suppose a consumer spends $48 on pizza and tacos per month. The price of pizza is $8 and the price of tacos is $2 per unit. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month is on the y-axis, which of the
- Suppose you want to calculate a university price index (UPI). Let's keep things simple and assume that a typical student buys seven textbooks, nine pizzas, and twelve six-packs of beer in a year. The table below shows this market basket and the price of e
- When calculating the cost of college, which of the following should you probably include? a) The cost of your meal plan for the cafeteria, b) The cost of books required for college classes, c) The income you earn at your part-time job, d) The cost of livi
- Suppose you win a sweepstake that allows you to consume as much pizza as you want within a year. Despite the zero price of a pizza, you do not eat pizza every meal. This is because: a. of diminishing the total utility of pizza. b. of diminishing average
- Jay purchases 3 sandwiches and 5 slices of pizza per month. At this consumption bundle, Joe's marginal rate of substituting pizza for sandwiches is 2/5. The price of a sandwich is $6 and the price of one slice of pizza is $4. 1) Show the current consumpt
- Suppose a pizza parlor has the following production costs: $5.00 in labor per pizza, $2.00 in ingredients per pizza, $0.20 in electricity per pizza, $5000 in restaurant rent per month, and $500 in ins
- Assume that the price of a pizza is $15, the price of a compact disk is $15, and the price of a movie is $5. How many units of pizza will C. Chang consume if he spends all of his income of $90 a month on these three goods. a. two b. three c. four d. five
- Assume that the price of a pizza is $10, the price of a compact disk is $15, and the price of a movie is $5. How many units of pizza will C. Chang consume if he spends all of his income of $90 a month on these three goods? a. two b. three c. four d. five
- Suppose a pizza parlor has the following production costs: $5.00 in labor per pizza, $4.00 in ingredients per pizza, $0.40 in electricity per pizza, $4,000 in restaurant per month, and $400 in insuran
- The meal plan at a university lets students eat as much as they like for a flat fee of $600 per semester. Students currently consume (on average) 200 pounds of food a semester. The university is considering changing to a meal plan that charges students $6
- Suppose that Tiffany has an income of $20 per week and she spends it on frozen pizza (P) and beer (B).The price of a bottle of beer (PB) is $1 and the price of frozen pizza (Pp) is $5 per pizza. (a)
- Assume that a college student spends her income on Coke and Snickers. The price of a Snickers candy bar is $0.50, and a can of Coke is $0.75. If she has $20 of income, what could she choose to consume?
- Suppose you own a restaurant, and you have just contracted for one year to pay $2,000 per month for rent of the commercial space. The waiters, cooks, your own labor, food, and utilities cost you anoth
- Suppose that Donald has $200 to spend per week and he buys only ice cream and pizza. Suppose further than pizza is a normal good and that for pizza income effect dominates the substitution effect. If the price of a pizza doubles, which of the following is
- The monthly cost of a thrifty food plan for a household with 2 adults (estimated by the USDA) is $380. Based on this data, what would be the monthly poverty threshold for a household with 2 adults?
- Suppose Mary?s income is $100 per week, which she allocates between sandwiches and books. Sandwiches cost $2 each. Books cost $10 each if she purchases between 1 and 5 books. If she purchases more tha
- Suppose that Sam allocates his income between milk and cereal. Milk costs $2.50 per gallon, and cereal costs $5.00 per box. Sam has $50 per week to spend on these two goods. The following table shows
- a) Draw the budget constraint for a person with an income of $1,000 if the price of Pepsi is $5 and the price of pizza is $10. b) Choose any combination of pizzas and from the table and write a proper budget equation with Pizza denoted as good x and Peps
- Assume you took a new job where your employer provides you with housing, clothing, a company car, and a monthly wage of $800. Assume that you spend your monthly wage on either going out or eating at home. The price of a home-cooked meal is $20, while the
- Suppose the wages of the cafeteria workers on campus increase by 10%, forcing the price of meals to increase at the same time your scholarship income doubles. (Cafeteria meals are an inferior good.) How will these changes impact the quantity and price lev
- Suppose a pizza parlor has the following production costs: $5 in labor per pizza, $4 in ingredients per pizza, $0.60 in electricity per pizza, $5,000 in restaurant rent per month, and $200 in insurance per month. Assume the pizza parlor produces 2,000 piz
- Assume that you have $100 to spend on food and clothing. The price of food is $5 and the price of clothing is $10.a. Graph your budget constraint.b. Suppose that the government subsidizes clothing suc
- Suppose your tuition is $20,000 this semester and your books cost $1,000. You can only work 20 rather than 40 hours per week during the 15 weeks you are taking classes, and you make $10 per hour. Your room and board cost $5,000 this semester. What is your
- A university cafeteria changes from offering all-you-can-eat meals for one low price to selling each food item separately. After this change, one would expect that the marginal utility of the last food item consumed in the cafeteria by the typical student
- Suppose that your preferences are defined over food and leisure. Food is purchased with income earned through working. You have 18 hours a day that you divide between work and leisure. Assume food, F, costs $5 per unit and your income is equal to your wa
- Suppose you want to analyze the number of bottles of beer that students drink on an average week. You are told that the number of bottles depends on how much income they have, the price of beer per bo
- Suppose Carlos has a weekly budget of $32 to spend on coffee and cereal. Coffee is priced at $4 per cup, and cereal is priced at $2 per box. If Carlos spends his entire $32 on coffee, he can buy _____ cups of coffee. If he spends his entire $32 on cereal,
- Assume that Jack has the preferences shown in the above table. Also assume that the price of a can of Pepsi is $3.00 and that the price of a slice of pizza is $1.00. If he has $16 available to spend, what combination of Pepsi and pizza will be his consume
- Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows:- 25 pizzas, $10 each - Apartment rent, $600 per month - Gasoline
- The market price of pizza in College Town decreased recently. Some students in an economics class suggest that the price fell because several new pizza parlors opened for business in the area.
- Connie has a monthly income of $200, which she allocates between two goods: meat and potatoes. a) Suppose meat costs $4 per pound and potatoes cost $2 per pound. Draw her budget constraint. b) Suppose
- Suppose the price of bagels in Allentown is currently $0.75 per bagel. There are 10 low-cost bakeries that can produce bagels, each of which has the supply function Qs = 200P - 100. There are 10 high-cost bakeries that can produce bagels, each of which ha
- Suppose you decided to charge $10 per pizza and you are able to sell 700 pizzas per month. The cost of operating your restaurant is $5,000 per month. You also had to quit your job to operate your rest
- Connie has a monthly income of $200 that she allocates between two goods: meat and potatoes. a) Suppose meat costs $4 per pound and potatoes $2 per pound. Draw her budget constraint. b) Suppose also
- Assume you own a pizza shop close to the campus at Monroe College. You have owned and operated your pizzeria for more than 10 years. During that time, your annual operating costs have increased from $
- A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O' Soup for $1.50 per meal. Her weekly food budget is $60. a. Draw the budget constraint showing the trade-off between dining hall meals and Cups O' S
- Suppose the price index in State College, PA is 122 and 263 in New York City (as always, we assume the basket is exactly the same in both locations). Suppose also that you are currently making $75,000 in State College. What income do you need to be offere
- Suppose the price of bagels in Allentown is currently $1.05 per bagel. There are 10 low-cost bakeries and 10 high-cost bakeries that can produce bagels, each of which has the supply function low-cost bakery: Qs(low-cost) = 200P - 125 high-cost bakery: Q
- Suppose that Marky has a utility function for two goods, hot dogs (H) and pizza slices (P), is U(H,P) = 3H + 4P The price of a hot dog is $1 and the price of a slice of pizza is a $2 per unit; and Ma
- Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows: 20 pizzas, $10 each, Rent of apartment, $600 per month, Gasoline
- Suppose that the AC and MC per bottle of vending machine soda pop is $1.25. At this price, suppose that campus vending machines would sell 1 million cans annually. Assume that the University allows only a single firm to supply vending machine soda pop, an
- Emilio buys pizza for $10 and soda for $2. He has an income of $100. His budget constraint will experience a parallel outward shift if which of the following events occur? a) The price of pizza falls to $5, the price of soda falls to $1, and his income fa
- A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O' Soup for $1.50 per meal. Her weekly food budget is $60. a. Draw the budget constraint showing the trade-off between dining hall meals and Cups O' So
- Suppose your tuition is $2,000 this semester, your books cost $400, you can only work 10 hours rather than 40 hours per week during the 15 weeks you are taking classes, you make $12 per hour, and your room and board is $4,000 this semester (the same as if
- Consider an economy with only two goods: bread and butter. Suppose in 2010, the typical family bought fifty loaves of bread at $2 per bread and ten packs of butter for $5 per pack. In 2014, the bread cost $3 and the pack of butter $6 per pack. Calculate t
- Assume that you have a budget of $30 to spend on milk and cereal only. The price of milk is $5.00 and the price of cereal is $3.50. a. What is the most you can purchase of cereal? b. If you purchase 3 units of milk, how many units of cereal can you purcha
- Assume that you have a budget of $25 to spend on milk and cereal only. The price of milk is Pm = $4.00 and the price of cereal is Pc = $5.00. 1. Graph the budget constraint. Be sure to put the quantit
- A college student has two options for meals: eating at the dining hall for $6 per meal or eating a Cup O'soup for $1.50 per meal. His weekly food budget is $60. Draw the budget constraint showing the trade-off between dining hall meals and Cups O'Soup. A
- a) If the person wants to spend an equal amount of money on both pizza and Pepsi what combination of quantity of both goods needs to be purchased to satisfy the budget constraint? Write the budget equation in this case? b) What happens to the budget equ
- Suppose you go to University and live in a residential college on campus. You pay the college for your room and board. Assume that you would have had to move out of home (with your parents) whether you went to university or taken up a full-time job and th
- Suppose for Donnie, cookies and milk are perfect complements. For every cookie he eats, he wants one glass of milk. Suppose his allotted income for cookies and milk is $12 per week, the price of cooki
- Jake brings $40 to a football game to spend on sodas and pizza. The following diagram shows his budget constraint: According to the diagram, sodas cost _ each, and pizza costs _ per slice. Adjust t
- Suppose there are two goods, food, c, and leisure, L. The prevailing prices of c and L are p = $1/unit and w = $10/hr:, respectively. Suppose you can consume no more than 24 hours of leisure per day a
- Consider the pizza market in a small college town with the following assumptions: The market is in long-run equilibrium. Each pizza shop sells 100 pizzas per week. (For ease of exposition, suppose tha
- Suppose Jamal has a monthly income of $100. He consumes two commodities, Coke and chips. The price of Coke is $4 per can for the first 20 cans purchased, and then drops to $2 for cans purchased over 20. The price of chips is $3 per bag for the first 10 ba
- Which of the following is a variable expense for many adults? a. their monthly cost of eating out at restaurants b. their monthly rent payment c. the monthly payment on their car loan d. their monthly payment for health insurance
- The market price of pizza in College Town decreased recently. Some students in an economics class suggest that the price fell because several new pizza parlors opened for business in the area. Other s
- A student spends all of her income on pizza and books. When pizzas cost $3 each and books cost $10 each, she consumed 30 pizzas and 3 books per month. The price of pizzas fell to $2.90 each while the price of books rose to $11 each. The price change: a. m
- Suppose Simon's utility function for two goods, bags of pretzels, P, and 6 packs of beer, B, is given as follows: U = Min {3B, P}. Simon has $100 per month to spend on beer and pretzels, and pretzels cost $1 per bag while a six pack of beer costs $7. Find
- Jack has $60 to spend on lunch each week. He eats either at the Taco Hut, which costs $10, or the Pizza Shack, which costs $12. Which of the following combinations is on Jack's budget line? a) 4 lunches at Taco Hut and 2 lunches at Pizza Shack, b) 0 lunch
- Suppose that the MRS is 4 cups of coffee per pizza and that the prices of coffee and pizza are $2.50 and $10 respectively. In this situation _____.
- Suppose that Manuel is trying to decide how much tuna and chicken to buy for the week. The grocery store that Manuel shops at has a special this week - if you buy more than 3 units of chicken, you get a 20% discount on all additional units of chicken that
- a) Suppose Amanda spends all of her income of $1,000 on mascara(M), and chocolate (C). The prices per unit are PM=$5 and PC = $10. What is the maximum amount of chocolate that she can consume? i) 1,0
- Imagine that you are out to eat with a large group of friends, and your employer is paying the bill, thus in effect subsidizing your food purchases to the point where they cost you nothing. From an ec
- Suppose Carlos has a weekly budget of $48 to spend on yogurt and juice. Juice is priced at $4 per gallon, and yogurt is priced at $6 per bowl. (a.) Graph Carlos' budget constraint. Indicate the area o
- Suppose you get two job offers when you graduate. The first offer is in LA and pays $16000/month. The price of food in LA is $2 and price of housing is $8. The second offer is in SF. Both food and housing are more expensive in SF at Pf=4 and Ph=9 respecti
- Suppose that Clancy and Eileen are the only suppliers of pizza slices in a particular market. The following table shows their weekly supply schedules: Price Clancy's Quantity Supplied Eileen's Quantit
- Suppose someone can enter a certain full-time two-year master's degree program at a cost of $50,000 per year (tuition and living expenses - one payment made at the beginning of study and one payment after the first year). After graduating in two years, th
- 3. Suppose we are studying the market for burgers. Bob is the sole provider of burgers in the market; he faces the following cost function: C(Q) = Q^2 + 9, and the following3. Suppose we are studying
- Over a period of two years, average income in Collegetown increased from $1,000 to $1,400. During the same period, the quantity of pizza demanded increased from 6,000 per month to 10,000 per month. As
- Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25 and that a student's beverage budget is $20 per week. If you were going to write an algebraic expression of thi
- Suppose that with a budget of $210, Deborah spends $126 on sushi and $84 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, after the price of bagels falls to $1 per bagel
- Suppose Bob has a yearly budget of $120 to spend on milk and yogurt. Milk is priced at $2 per gallon, and yogurt is priced at $6 per container. If Bob spends his entire $120 on milk, he can buy _____ gallons of milk. If he spends his entire $120 on yogurt
- Assume that households consume only hotdogs and soda; the average household consumes 12 hotdogs and 20 bottles of soda. In 1995, a hot dog was $0.90 each and soda $0.50 each. In 2003, hotdog price wen
- Suppose LeBron James buys 4 Big Macs and 6 pizzas per week when his income is $4,000/week. When his income changes to $6,000/week, he buys 8 Big Macs and 2 Pizzas/week. Based on this data, it can be concluded that James' income elasticity for Big Macs is:
- Suppose students like to eat pepperoni pizza, bean and rice burritos, and hamburgers (made from beef) from the food establishments on campus. What is most likely to increase the quantity of hamburgers sold?
- You have $4,000 to spend on entertainment this year. The price of a day trip (T) is $40 and the price of pizza and a movie (M) is $20. Suppose that your utility function is U(T,M)=T^(3/4)M^(1/4). a)
- Emil buys pizza for $10 and soda for $2. He has an income of $100. His budget constraint will experience a parallel outward shift if which of the following events occur? a. The price of pizza falls to $5, the price of soda falls to $1, and his income fall
- a) Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket f
- Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket for
- Suppose your college charges you separately for tuition, and for room and board. What is a cost of attending college, that is not an opportunity cost? What is an explicit opportunity cost of attending
- The market price of pizza in College Town decreased recently. Some students in an economics class suggest that the price fell because several new pizza parlors opened for business in the area. Other students attributed the fall in the price for pizza more
- Consumers in England consume only two goods, magazines and pizza. If they spend $50 on magazines and $90 on pizzas a month, how many magazines and pizzas are in their CPI market basket if the price of
- Consider the pizza market in a small college town with the following assumptions: - The market is in long-run equilibrium. - Each pizza shop sells 100 pizzas per week. (For ease of exposition, suppo
- An individual's budget Suppose Raphael has a monthly budget of $80 to spend on juice and cereal. Juice is priced at $4 per gallon, and cereal is priced at $2 per box. If Raphael spends his entire $8
- Suppose the price of a filet mignon at Texas Roadhouse is $10. When Michael's old income was $2,000 per month, his old monthly demand for filets was Q = 15 - 0.25P. When Michael got a pay raise and began to earn a new income of $2,200 per month, his deman
- The table belwo represents the hourly output and cost structure for a local pizza shop. The market is perfectly competitive, and the market price of a pizza in the area is $12. Total cost include all
- Suppose you live in a small college town where, every weekend, ten independent food-cart owners set up shop and sell hot dogs on the street, they are popular with students, and where they frequently locate where students hang out. Suppose on the evening y
- The Upper Classman Deli operates near a college campus. It has been selling 325 sandwiches a day at $1.75 each and considering a price cut. It estimates 450 sandwiches would sell per day at $150 each.
- The city has a number of hot dog food trucks operating throughout the downtown area. Suppose that each food truck has a marginal cost of $1.50 per meal sold and no fixed cost. Suppose the maximum that any food truck can sell is always 100 meals per day.
- Suppose Al Fresco enjoys going to eat at Italian restaurants where the average meal costs $45.00 and he has $450.00 to spend. In terms of purchasing power, how much is Al Fresco's money worth?
Explore our homework questions and answers library
Browse
by subject