Order the answer to: Freddy Frolic consumes only asparagus and tomatoes, which are highly

Order the answer to: Freddy Frolic consumes only asparagus…

Question	Freddy Frolic consumes only asparagus and tomatoes, which are highly seasonal crops in Freddy’s part of the world. He sells umbrellas for a living, which provides a fluctuating income depending on the weather. But Freddy doesn’t mind; he never thinks of tomorrow, so each week he spends as much as he earns. One week, when the prices of asparagus and tomatoes were each $1 a pound, Freddy consumed 15 pounds of each. Use blue ink to show the budget line in the diagram below. Label Freddy’s consumption bundle with the letter A. (a) What is Freddy’s income (b) The next week the price of tomatoes rose to $2 a pound, but the price of asparagus remained at $1 a pound. By chance, Freddy’s income had changed so that his old consumption bundle of (15,15) was just affordable at the new prices. Use red ink to draw this new budget line on the graph below. Does your new budget line go through the point A? _____. What is the slope of this line? ______. (c) How much asparagus can he afford now if he spent all of his income on asparagus? (d) What is Freddy’s income now? (e) Use pencil to shade the bundles of goods on Freddy’s new red budget line that he definitely will not purchase with this budget. Is it possible that he would increase his consumption of tomatoes when his budget changes from the blue line to the red one?
Subject	business economics

Question

Freddy Frolic consumes only asparagus and tomatoes, which are highly seasonal crops in Freddy’s part of the world. He sells umbrellas for a living, which provides a fluctuating income depending on the weather. But Freddy doesn’t mind; he never thinks of tomorrow, so each week he spends as much as he earns. One week, when the prices of asparagus and tomatoes were each $1 a pound, Freddy consumed 15 pounds of each. Use blue ink to show the budget line in the diagram below. Label Freddy’s consumption bundle with the letter A.
(a) What is Freddy’s income
(b) The next week the price of tomatoes rose to $2 a pound, but the price of asparagus remained at $1 a pound. By chance, Freddy’s income had changed so that his old consumption bundle of (15,15) was just affordable at the new prices. Use red ink to draw this new budget line on the graph below. Does your new budget line go through the point A? _____. What is the slope of this line? ______.
(c) How much asparagus can he afford now if he spent all of his income on asparagus?
(d) What is Freddy’s income now?
(e) Use pencil to shade the bundles of goods on Freddy’s new red budget line that he definitely will not purchase with this budget. Is it possible that he would increase his consumption of tomatoes when his budget changes from the blue line to the red one?

Subject

business economics

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