Assignment
The price of cappuccinos is $3, the price of a theatre ticket is $12, and consumer income is $72.
(a) In a graph with theatre tickets on the vertical axis and cappuccinos on the horizontal axis, draw the budget constraint to scale, marking the intercepts.
(b) Suppose the consumer chooses the combination of 4 theatre tickets and 8 cappuccinos. Draw such a point on the budget constraint and mark the affordable and non-affordable regions.
(c) Is the combination of 3 tickets and 24 cappuccinos affordable?
(d) Is the combination in part (c) preferred to, or less preferred than, the chosen point in part (b)?
(e) If the price of cappuccinos falls to $2 per cup, is the combination of 24 cappuccinos and 3 tickets affordable?
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.