Suppose you have $30 and you are going to rent some movies and buy some sodas.  Suppose movie rentals are $6.00 each and sodas are $1.00 each.  Your original consumption bundle is 3 movies and 12 sodas. (Hint: put movie rentals on the X axis)   a)Draw your budget line showing the different combinations of Movies that you can rent and sodas that you can purchase.   b)Suppose that movie rentals turn out to be half off ($3.00). Draw your new budget line on the same graph.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Suppose you have $30 and you are going to rent some movies and buy some sodas.  Suppose movie rentals are $6.00 each and sodas are $1.00 each.  Your original consumption bundle is 3 movies and 12 sodas. (Hint: put movie rentals on the X axis)

 

a)Draw your budget line showing the different combinations of Movies that you can rent and sodas that you can purchase.

 

b)Suppose that movie rentals turn out to be half off ($3.00). Draw your new budget line on the same graph.

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