Micro economics question

Posted by harish on Jan 16, 2017; 8:02am
URL: http://discussion-forum.276.s1.nabble.com/Micro-economics-question-tp7603077.html

I have three questions, I have doubts in, if anyone can help me tell how the solution has been arrived at,I would be grateful.

Topic - Budget constraint

Questions

2.26 Young Alasdair loves lollipops and hates oatmeal. To induce him to eat enough oatmeal and to restrain him from eating too many lollipops, his mum pays him 10 pence for every quart of oatmeal that he eats. The only way that he can get lollipops is to buy them at the sweet shop, where lollipops cost 5 pence each. Besides what he earns from eating oatmeal, Alasdair gets an allowance of 10 pence per week. If Alasdair consumes only oatmeal and lollipops and if his consumption bundles are graphed with quarts of oatmeal on the horizontal axis and lollipops on the vertical axis, then Alasdair's budget line:

(a) has a slope of 2.
(b) has a slope of less than 2.
(c) has a slope of 2.
(d) has a slope of 1=2.
(e) has a slope greater than 2.

Topic - Preferences

3.16 Ambrose has indi erence curves with the equation x2 = constant 4x1=2 1 where larger constants correspond to higher indi erence curves. If good 1 is drawn on the horizontal axis and good 2 on the vertical axis, what is the slope of Ambrose's indi erence curve when his consumption bundle is (16;9)?

(a) 16=9
(b) 9=16
(c) 0:50
(d) 13
(e) 4

3.20 If we graph Mary Granola's indi erence curves with avocados on the horizontal axis and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope of her indi erence curve is2. Whenever she has more avocados than grapefruits, the slope is 1=2. Mary would be indi erent between a bundle with 11 avocados and 23 grapefruits and another bundle that has 19 avocados and:

(a) 15 grapefruits.
(b) 19 grapefruits.
(c) 11 grapefruits.
(d) 13 grapefruits.
(e) 14 grapefruits

Answers to these questions and how they have been arrived at would be very helpful. Thanks.