Microeconomics

Learn the toughest concepts covered in Microeconomics with step-by-step video tutorials and practice problems by world-class tutors

Consumer Choice and Behavioral Economics

Budget Constraint

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1

concept

Budget Constraint (Budget Line)

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2
Problem

The Amazing Andy spends all of his $1,200 income on magic tricks. If card tricks cost $50 and wand tricks cost $300, which of the following consumption bundles lies upon Amazing Andy’s budget constraint?

3

concept

Budget Constraint:Change in Income

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4
Problem

An increase in income will:

5

concept

Budget Constraint:Change in Price of a Good

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6
Problem

A change in the price of one good will:

7
Problem

A consumption bundle inside the budget line

8
Problem

Lil Kiddo just got $10 for his allowance. He has big dreams for that money and plans to buy out the toy store, slapping down the tenner at the cash register. Disillusioned, he decides to buy pogs for $0.50 each and action figures for $2 each. Which consumption bundle is unaffordable to Lil Kiddo?

9
Problem

Campin’ Sam buys firewood and ice. When the price of firewood decreases, the maximum number of firewood she can purchase _____________ and the maximum number of ice she can purchase _______________