# After careful scrutiny, Robbin budgets \$12/week for Wings ‘n’ Suds

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After careful scrutiny, Robbin budgets \$12/week for Wings ‘n’ Suds
After careful scrutiny, Robbin budgets \$12/week for Wings ‘n’ Suds. Consider the following: Graph and label the axes to show how much of each good Robbin is able to buy, if the price of buffalo wing is \$0.50, while the price of Coca-Cola is \$1.50. In order to attract more customers to Wings ‘n’ Suds , management decides to lower the price of Coca-Cola to a buck. Show what happens to Robbin’s budget line compared to (a). Instead of (b), assume there is a sudden shortage of buffalo wings available. Now, Wings ‘n’ Suds has to raise the price of a wing to \$3. Show how this event changes Robbin’s budget line relative to (a). Robbin, after winning \$1,000 in the Texas lottery, decides that she can now spend \$36/week at Wings ‘n’ Suds. Show how this event changes Robbin’s budget line relative to (a). e. What combination of wings and Coca-Cola should Robbin buy in (a), (b), (c), and (d)?

Suppose that a college student can spend \$50 on entertainment
Suppose that a college student can spend \$50 on entertainment. This student derives satisfaction only from watching movies and playing video games. The price of a movie is \$5 and the price of a video game is \$2. Draw the correct budget line for this student. Label the axis. Provide the numerical amounts of movies and video games at the “extreme points.”

Betty and Wilma wish to buy T-shirts and shoes
Betty and Wilma wish to buy T-shirts and shoes. Betty has a budget of \$600, while Wilma has a budget of \$1,200. using the indifference curve analyses given in the following, determine prices fro the T-shirts and shoes. For which commodity can you derive a demand curve? Derive this curve for Betty and Wilma. Finally, derive the market demand curve, assuming that they are the only consumers. Quantity of T-shirts Pairs of Shoes Price of T-shirts Price of Shoes Betty Wilma continued...

continued...

Betty Wilma Market

Assume that for a given consumer, the marginal utility of Dreyer’s Ice Cream is 120, and the price of Dreyer’s is \$4 per gallon. Also, assume that the marginal utility of Blue Bell Ice cream is 160, and the price of Blue Bell is \$5 per gallon. This consumer a. is in equilibrium. b. should buy more Blue Bell. c. should buy more Dreyer’s. d. can’t tell; insufficient information.

Derive separate Engel curves for products A and B from the following indifference curve analysis. Assume PA = \$1.50 and PB = \$2.25. Are these goods normal or inferior? Point Quantity of A Quantity of B Income D E F Engel Curve for Product A Engel Curve for Product B continued...

QA E F D QB

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