The Cost of Hanging Out Exploring and Representing Relationships.

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Presentation transcript:

The Cost of Hanging Out Exploring and Representing Relationships

How much do you spend to hang out? How much money do you have to spend each month? Where does your money come from? What do you spend your money on?

Words to describe Income, Goods, Budget Income: Budget: Budget Constraint: Trade-off:

Definitions Income: Payments earned by households for selling or renting their productive resources. Can include salaries, wages, interest and dividends. Budget: A spending-and-savings plan, based on estimated income and expenses for an individual or an organization, covering a specific time period. Budget constraint: all the combinations of goods and services that a consumer may purchase given current prices within his or her given income. Trade-off: Given up some of one thing to gain some of something else.

Pat & Sam Hang Out Pat has started hanging out with Sam. Sam loves fries and so Pat rides the city bus to Sam’s house and then they ride together to Freddy’s Fry Shack to sit and talk.

Bus Route

What else do you need to know? What else would you need to know to find out how much Pat needs to spend to hang out with Sam and go to Freddy’s Fry Shack?

More Information Each time Pat gets on the bus he must have a token. One token is $2.00. The small order of fries at Freddy’s Fry Shack is $1.00. How much will he spend on the bus? _________________ How much will he spend on the fries? _________________

Combinations

Combinations $

Combinations $

What will $32 dollars buy? What equation could we write if x is the number of fries Pat buys and y is the number of tokens and the total must be 32 dollars? Price/fries Number of fries Price/token Number of tokens Total Spent $132$20$32 x y

What will $32 dollars buy? What equation could we write if x is the number of fries Pat buys and y is the number of tokens and the total must be 32 dollars? Price/fries Number of fries Price/token Number of tokens Total Spent $132$20$ x2y

Graphing your combinations

Graphing Fries and Tokens

Can Pat Stay Within his budget? What does the point (6,10) on your graph represent? Can Pat purchase 10 fries and 10 bus tokens? How do you know? Can Pat purchase 10 fries and 20 bus tokens? How do you know? What is the equation of the line?

Price of Fries Increases to $2  How would the budget constraint line be transformed if the price of fries went up to $2?

Shift in Budget Constraints

How Many Hangouts? How many times can Pat hang out with Sam each month given his new budget constraints?