Answer to Question #249011 in Microeconomics for Roshan

Question

5. Venkatesh is a student at JGU. He has a monthly budget of Rs. 2500 to spend on either samosas, which cost Rs. 50 each, or aloo-tikki burgers, which cost Rs. 30 each.

(a): Indicate which combinations would leave some budget unspent. a) those to the left of the line in the above graph b) those to the right of the line in the above graph

(b): What is the equation for Venkatesh’s budget constraint? In your equation, use q1 as the variable to represent the quantity of samosas and q2 to represent the quantity of aloo-tikki burgers.

(c): What is the opportunity cost of a samosa?

(d). What is the opportunity cost of an aloo-tikki burger?

(e): How can one see the opportunity cost of samosa on the graph? Show it in your diagram. 

Answer 1

Kindly provide the graph to be used in question a.