SOS has a budget of $600,000. Currently, two-thirds of their budget goes to purc

Question

SOS has a budget of $600,000. Currently, two-thirds of their budget goes to purchasing land, and one-third to lobbying. 1)what is the budget constraint? 2)Irwin M. Green, a rich philanthropist with an interest in environmental issues,offers SOS a $100,000 grant, with the stipulation that the funds can only be used to purchase new lands for protection. Thus, money from the grant can-not be used to support lobbying activities. Will the amount of land purchased by SOS increase by $100,000? Why or why not?

Explanation / Answer

SOS has a budget of $600,000. Currently, two-thirds of their budget goes to purchasing land, and one-third to lobbying. Budget for purchasing = 400 000 $ Budget for lobbying = 200 000 $ So constraint, Say, Budget for purchasing = Bp Budget for lobbying = Bl Then, Bp

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