Person A spends all his income ($100) on good X and composite good Y.

  • Thread starter 413
  • Start date
  • #1
413
41
0
Person A spends all his income ($100) on good X and composite good Y. Draw person A's budget constraint if good X sells for $5 each and each time he buys 5X, he receives a coupon redeemable for one unit of good Y.
How would you draw this graph?
 

Answers and Replies

  • #2
HallsofIvy
Science Advisor
Homework Helper
41,833
962
Set up an XY coordinate system. What is the largest possible number of good X he can buy? If he does that, how many Y does he get? Mark that point. Pick another possible value for X. Can he buy that many? How many Y would he get?
 

Related Threads on Person A spends all his income ($100) on good X and composite good Y.

Replies
12
Views
3K
  • Last Post
Replies
2
Views
895
  • Last Post
Replies
6
Views
3K
Replies
2
Views
5K
  • Last Post
Replies
18
Views
28K
  • Last Post
Replies
1
Views
1K
  • Last Post
Replies
1
Views
3K
Replies
18
Views
1K
Top