Demand
Practice Problems
Problem : Kate has $12. Pretzels cost $2 a bag, and soda costs $3 a bottle. Draw her budget constraint. If soda goes on sale for $2 a bottle, what does her new budget constraint look like?
Problem : Jeannette has $300. DVD's cost $30 and CD's cost $15. Draw her budget constraint for DVD's and CD's. Draw her budget constraint if she has $360.
Problem : J.P.'s indifference curves for beer and movies look like this:
J.P.'s Indifference Curves
Beer costs $4 and movies cost $6. If J.P. has $24, how much of each will he buy?
Problem : Draw the indifference curves for cashmere sweaters and moth-eaten sweaters (assuming that moth-eaten sweaters are undesirable and cashmere sweaters are desirable).
Problem : Lawrence is looking for tables and chairs. His indifference curves look like this:
Lawrence's Indifference Curves
He has $500 to spend, how many tables and chairs will he buy if chairs cost $50 and tables cost $100?
