# Tools IS Suppose Shen Has A Weekly Budget Of \$48 To Spend On Coffee And Yogurt. Coffee Is Priced At \$4

Tools IS Suppose Shen has a weekly budget of \$48 to spend on coffee and yogurt. Coffee is priced at \$4 per cup, and yogurt is priced at \$6 per container. If Shen spends his entire \$48 on coffee, he can buy yogurt. YOGURT (Containers) Use the blue line (circle symbol) to plot Shen’s budget line on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of coffee and yogurt for which Shen does not need to spend all of his income to consume. Finally, place the black point (plus symbol) on the point on Shen’s budget line that corresponds to a scenario in which Shen spends \$24 on each good. Note: Dashed drop lines will automatically extend to both axes. 228 2222 9 24 16 16 14 12 10 8 8 4 2 0 0 2 4 6 8 10 12 14 16 18 COFFEE (Cups) What does the slope of Shen’s budget line represent? True cups of coffee. If he spends his entire \$48 on yogurt, he can buy O False 20 22 24 Budget line for \$48 True or False: Shen faces the same tradeoff between coffee and yogurt. Combinations costing less than \$48 The opportunity cost of an additional cup of coffee in terms of containers of yogurt The cost of an additional cup of coffee in terms of dollars O The opportunity cost of an additional container of yogurt in terms of cups of coffee The cost of an additional container of yogurt in terms of dollars \$24 on each Budget line for \$72 Suppose Shen receives \$24 from his grandmother and decides to dedicate this money to buying more coffee and yogurt. Using the green line (triangle symbol), draw Shen’s new budget line on the previous graph. ? containers of

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This solution was written by a subject matter expert. It’s designed to help students like you learn core concepts.

Step-by-step

If Shen spends his entire \$48 on coffee, priced at \$4 per cup, he can buy \$48 / \$4 = 12 cups of coffee.

If he spends his entire \$48 on yogurt, priced at \$6 per container, he can buy \$48 / \$6 = 8 containers of yogurt.

Explanation:

So, Shen can buy 12 cups of coffee or 8 containers of yogurt with his weekly budget of \$48.

Here is the graph: