Business, 16.04.2020 03:53, GabriellaDul

Assume that Diego has $400 per month to divide between playing paintball and playing golf. Assume that playing paintball costs $40 and playing golf costs $20. Suppose Diego plays paintball six times per month and plays golf eight times per month. If paintball is on the y-axis and golf is on the x-axis then Diego's budget constraint has a y-intercept of nothing and an x-intercept of nothing. Assume that Diego has some unexpected expenses one month and can only spend $320 that month. Then Diego's new budget constraint has a y-intercept of nothing and an x-intercept of nothing. Diego cannot can afford two games of paintball and twelve rounds of golf since this bundle is on inside outside his budget constraint. Paintball is a normal an inferior good and golf is an inferior a normal good. Assume Diego has his original $400 per month to spend and the price of paintball is still $40, but the price of golf doubles to $40. Diego's new budget constraint has a y-intercept of nothing and an x-intercept of nothing.

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Assume that Diego has $400 per month to divide between playing paintball and playing golf. Assume th...