ECN 130 Summer 2014 Problem Set #1
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1. You have $600 to spend on beans and rice. The price of beans is $40 and the price of rice is $30.
a. Graph your budget constraint with books on the vertical axis
b) Suppose that the government subsidizes beans such that each unit of beans are half-price, up to the
first 2 units (any additional units are full price). Graph your budget constraint in this circumstance.
2. Consider a free market with demand equal to Q = 100
- 10 years ago
ECN 130 Summer 2014 Problem Set #1 Solution
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