Economics and Quantitative Analysis

ECONOMICS AND
QUANTITATIVE ANALYSIS

TABLES OF CONTENTS
Question 1........................................................................................................................................3
Question 2........................................................................................................................................5
Question 3........................................................................................................................................5
Question 4........................................................................................................................................6

Question 1
a) The budget constraint equation = 40X + 20Y = $400
The graph from above equation is shown under:
40 Slope = 40X + 20Y = $400
UFO Video 30
(Good Y)
20 Slope = -10/20 = -1/2
10
10
Magazines (Good X)
Interpretation: This states that, to consume more of good Y, consumers will scarifies with 1
Magazine to consume 2 UFO videos. The slop between (0, 10) on X axis and (0, 20) is within
income left of consumers while above the slope is unaffordable by consumers to purchase any
one of good.
b) The tradeoff between magazine and UFO that to purchase more of conspiracy magazine
consumers will need to scarifies 2 UFO videos to purchase additional 1 magazine.
c) Here the new budget is set at $200. The following new graphic