Show transcribed image text 100% (1 rating)Ans. All the answe…View the full answerTranscribed image text: ECO 100 Chapter 2 Homework Use John’s budget constraint graph below to answer the questions that follow. If John’s budget is $48: 1. What is the price of a bottle of wine? 2. If John purchased 6 bottles of wine, what is the maximum number of units of cheese he can purchase? 3. If John purchased 9 bottles of wine and 9 units of cheese, how much change would he be left with? 4. John has a budget of $30 that he spends on milk and bread. The price of milk is $7.79 and the price of the bread is $5.15. What is John’s budget constraint equation if he purchases only these two goods with his $30 income? 5. Jack has a budget of $60 that he spends on apples and oranges. He would like to purchase 10 apples and 5 oranges. If the price of an apple is $3, what must be the price of the orange? Will spent all the money he had set aside for shopping on shoes and clothes. He bought two pairs of shoes for $35 each and two $15 shirts. What was Will’s budget for shopping? Helpful Tip Box The budget constraint equation is: Budget = $P, xQ, $P₂×Q; 7. The price of movie tickets is $12 and the price of a meal at the movies is $8. Given John’s weekly entertainment budget of $48. Draw a budget constraint to illustrate John’s weekly entertainment budget constraint. 8. Given a budget of $60 the price of pizza is $10 while the price of beer is $6; draw a budget constraint to illustrate this scenario, 9. Use the information from the previous question: If the price of pizza stays the same, but the cost of beer increases to $10; on the same graph, draw a new budget constraint. 10. Define opportunity cost. Use the information below to answer the questions that follow. Round all answers 2 decimal places. Suppose that Argentina and Italy each produce only two goods: robots and furniture. When Argentina produces only robots, it produces 100 units of robots. When it produces only furniture it can produce 200 units of furniture. When Italy only produces robots, it can produce 300 units of robots; while it can produce 100 units of furniture when it only produces furniture. 11. What is Argentina’s opportunity cost of producing robots? 12. What is Argentina’s opportunity cost of producing furniture? 13. What is Italy’s opportunity cost of producing robots? 14. What is Italy’s opportunity cost of producing furniture? 15. Suppose the marginal cost of ordering a pizza is $10, but the marginal benefit of consuming pizza changes according to the table below. 1 slice $18 $16 2 slices 3 slices 4 slices 5 slices 6 slices 7 slices 8 slices 9 slices $14 $12 $10 $8 $6 $4 $2 How many slices of pizza would you eat? 16. If after 5 hours of studying, the marginal benefit of studying an extra hour is lower than the marginal cost of studying for another hour. Should you keep studying or stop studying? 17. According to marginal analysis, we should continue pursuing an activity as long as that activity’s marginal cost is equal to its___________ 18. According to economic theory, when making decisions about which goods and services to purchase, consumers behave in a way that maximizes their 19. The marginal benefit derived from each extra unit of consumption is also called 20. The economy theory that describes the decrease in marginal benefit with each additional unit of consumption is called 21. Define a sunk cost.
