Problem
Print this page out and use the space below and the back to write out and clearly indicate your answers. Do not use this sheet as scrap paper, but use it to neatly present your work. A small gift shop in Dublin sells porcelain clovers and leprechauns to tourists. Prices are set both in euros (E) and pounds sterling (f). In Euros, the price of clovers is 2 and price of leprechauns is 4. In pounds, the price of clovers is 5 and price of leprechauns is 2. It's Sunday and the banks are closed, so no one can change money. Suppose Agnes walks into the gift shop with 100 euros. In the space below, write down Agnes' budget constraint, and draw a graph of the budget line with clovers on the horizontal axis and leprechauns on the vertical axis. Suppose Dillon walks into the gift shop with 120 pounds. Write down Dillon's budget constraint and draw his budget line in the same graph. Suppose Agnes and Dillon were to pool their money to buy clovers and leprechauns How many clovers could they buy in total if they spent all their money on clovers? How many leprechauns could they buy in total if they spent all their money on leprechauns? Draw in their budget constraint for clovers and leprechauns.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.