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

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. [tex]I= Price Gasoline * G + Price Shirts * S[/tex]

[tex]I= Income[/tex] , [tex]Price Shirts= 10$[/tex]

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

[tex]G= \frac{I}{PriceGasoline}- \frac{PricesShirt}{PriceGasoline} * S[/tex]

[tex]Price Gasoline= 5$ \\Income= 500$[/tex]

a).

[tex]I=PriceG*G +PriceS*S\\I= 5*100+10*50[/tex]

[tex]I=1000$[/tex] is the double of the budget

b).

[tex]I=PriceG*G +PriceS*S\\I= 5*0+10*50[/tex]

[tex]I=500$[/tex] is all the budget

c).

[tex]I=PriceG*G +PriceS*S\\I= 5*100+10*0[/tex]

[tex]I=500$[/tex] is all the budget

d).

[tex]I=PriceG*G +PriceS*S\\I= 5*10+10*5[/tex]

[tex]I=100$[/tex] is lower that the budget

kolajero8 kolajero8 · Answer 2 · 2020-02-19T17:30:13+01:00

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.