ECO 305 Lecture Notes - Lecture 2: Composite Good

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26 May 2018
Department
Course
Professor
ECO 305
Prof. Mirhosseini
24 January 2018
Assignment 2
Paula has $120/wk budget for entertainment (watching plays and movies). If play tickets cost
$12 each and movie tickets cost $5 each, show her budget line. (20 points)
Suppose your local phone company offers you the following plan. Pay an initial $2/wk, which
allows you up to 30 calls per week at no charge. Any calls over 30/wk costs $0.05 per call. If
your income is $12/wk and the composite good costs $1, graph your budget constraints for the
composite good and the phone calls. (40 points)
0
2
4
6
8
10
12
030 50
Composite Goods
Phone Calls
0
2
4
6
8
10
12
0 5 10 15 20 25 30
Play Tickets
Movie Tickets
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Document Summary

Paula has /wk budget for entertainment (watching plays and movies). each and movie tickets cost each, show her budget line. (20 points) s t e k c i. Suppose your local phone company offers you the following plan. Pay an initial /wk, which allows you up to 30 calls per week at no charge. Any calls over 30/wk costs sh. 05 per call. If your income is /wk and the composite good costs , graph your budget constraints for the composite good and the phone calls. (40 points) s d o o.

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