Question

Tonya's budget constraint for gallons of gasoline (G) and shirts (S) each month can be expressed by the equation G = 100 – 2S, where G is the number of gallons of gasoline she buys and S is the total number of shirts she buys. Assume that she spends her entire budget each month. If the price of shirts is $10, which consumption bundle lies INSIDE Tonya's budget line?
a.) 50 units of clothing and 100 units of gasolineb.) 50 units of clothing and 0 units of gasolinec.) 0 units of clothing and 100 units of gasolined.) 5 units of clothing and 10 units of gasoline

Answer 1

Answer:

a). 1000$

b). 500$

c). 500$

d). 100$

Explanation:

1. $G= 100- 2* S$

Budget constraint is the relation between the price of the gallons of gasoline and shirts, knowing the price of the shirts can write down the equation:

    2. $I= Price Gasoline * G + Price Shirts * S$

$I= Income$ , $Price Shirts= 10$

From equation 1 know the price of gasoline and the income so now can figure each scenery

$G= \frac{I}{PriceGasoline}- \frac{PricesShirt}{PriceGasoline} * S$

$Price Gasoline= 5 \\Income= 500$

a).

$I=PriceG*G +PriceS*S\\I= 5*100+10*50$

$I=1000$ is the double of the  budget

b).

$I=PriceG*G +PriceS*S\\I= 5*0+10*50$

$I=500$ is all the  budget

c).

$I=PriceG*G +PriceS*S\\I= 5*100+10*0$

$I=500$ is all the  budget

d).

$I=PriceG*G +PriceS*S\\I= 5*10+10*5$

$I=100$ is lower that the  budget

Answer 2

Answer:

a.) 50 units of clothing and 100 units of gasoline

Explanation:

Since G = 100 – 2S

When Tonya bought zero unit of gasoline, we have G = 0.

Therefore,

100 - 2S = 0

2S = 100

S = 100/2

S = 50

When Tonya bought zero unit of shirts, we have, we have S = 0

Therefore, G = 100 - 2(0)

G = 100

Therefore,  If the price of shirts is $10, which consumption bundle lies INSIDE Tonya's budget line 50 units of clothing and 100 units of gasoline.