A recent newspaper circular advertised the following special on tires: "Buy three, get the fourth tire for free-limit one free tire per customer." If a consumer has $360 to spend on tires and other goods and each tire usually sells for $40, plot this consumer's opportunity set when this special is offered. Instruction: If the opportunity set has any kinks, be sure to plot all the points where the kinks occur, in addition to the points where the line crosses the intercepts. Graph the budget set from where Tires= 0 to where it crosses the X-axis. Income Spent on Other Goods 400-1 380- 360- 340- 320- 300- 280- 260- 240- 220- 200- 180- 160- 140- 120- 100- 80- 80- 40- 20- 0 Opportunity Set Budget Set
A recent newspaper circular advertised the following special on tires: "Buy three, get the fourth tire for free-limit one free tire per customer." If a consumer has $360 to spend on tires and other goods and each tire usually sells for $40, plot this consumer's opportunity set when this special is offered. Instruction: If the opportunity set has any kinks, be sure to plot all the points where the kinks occur, in addition to the points where the line crosses the intercepts. Graph the budget set from where Tires= 0 to where it crosses the X-axis. Income Spent on Other Goods 400-1 380- 360- 340- 320- 300- 280- 260- 240- 220- 200- 180- 160- 140- 120- 100- 80- 80- 40- 20- 0 Opportunity Set Budget Set
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 6PA
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