Violet buys pies (x) and champagne (y) with her income of $240. The price of cha

Question

Violet buys pies (x) and champagne (y) with her income of $240. The price of champagne is p_y = $10 per bottle. Draw her budget constraints in each of the following cases assuming that both goods are divisible. (For each part, use the given template to draw her constraints, and then use your completed graph to fill in the description. Enter any points in order from left to right as they would appear on the graph.) (a) Pies cost p_x = $15 per pie if she buys between zero and 8 pies, and $10 per pie if she buys more than 8 pies. Up to 8 pies, the budget has a slope of. If every pie were priced at $10 per pie, the budget line would extend from () to () However, Part of the line does not apply and would be dashed: the segment form ()to(). Therefore, the rest of the line with a jump discontinuity at () is part of Violet's budget constraint. The slope of the lower part of the budget line is .

Explanation / Answer

Ans: Given that income =$240 & py=$10.

With the above information , if he buys all Y , he will buy 24 units and 0 units of X.

a) On buying anywhere between 0 to 8 pies, the px=$15, but px reduces to $10 if he buys more than 8 pies.

So, up to 8 pieces, the budget line has a slope of 12/8= 1.5

If every pie were at $10, the budget line would extend from (0,24) to (24,0)

The part of the line that does not apply & shoudl be dashed would be from (8,12) to (24,0)

Therefore the rest of the line with a jump discontinuity is at point (8,12).

The slope of the lower part of the budget line is 12/12 =1

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