Suppose a consumer derives satisfaction from consuming two types of hamburgers, X and Y.
a.Graph the budget line of the consumer under the assumption that he is offered a "buy two, get one free" deal for burger X (limit one free burger).
b.Graph the budget constraint under the assumption that the producer of burger Y also offers a "buy two, get one free" deal (limit one free burger).
c.Explain in words why each of the above budget constraints looks as it does.
C.After the third one, the deal becomes ineffective for you.Hence, CD has the same slope as AB does.
Figure 4-13a Figure 4-13b

Question

Suppose a consumer derives satisfaction from consuming two types of hamburgers, X and Y.
a.Graph the budget line of the consumer under the assumption that he is offered a "buy two, get one free" deal for burger X (limit one free burger).
b.Graph the budget constraint under the assumption that the producer of burger Y also offers a "buy two, get one free" deal (limit one free burger).
c.Explain in words why each of the above budget constraints looks as it does.
C.After the third one, the deal becomes ineffective for you.Hence, CD has the same slope as AB does.
  Figure 4-13a Figure 4-13b

Quizplus · Accepted Answer

The Answer of Suppose a consumer derives satisfaction from consuming two types of hamburgers, X and Y.
a.Graph the budget line of the consumer under the assumption that he is offered a "buy two, get one free" deal for burger X (limit one free burger).
b.Graph the budget constraint under the assumption that the producer of burger Y also offers a "buy two, get one free" deal (limit one free burger).
c.Explain in words why each of the above budget constraints looks as it does.
C.After the third one, the deal becomes ineffective for you.Hence, CD has the same slope as AB does.
  Figure 4-13a Figure 4-13b

Suppose a Consumer Derives Satisfaction from Consuming Two Types of Hamburgers