Jim Whitney Economics 250
Budget line examples
 
Use the diagrams below to show how each of your group's assigned events would alter the initial budget line illustrated in the diagram
 
Chalk color  Event
Group 1 a. Blue Your income doubles.
b. Orange The price of y doubles.
c. White With volume discounts, once you purchase 3 units of x at the regular price, you can purchase extra units for 1/2 price.
     
Group 2 a. Blue The government imposes a 33 percent income tax.
b. Orange The price of x falls by 50 percent.
c. White With "lifeline rates," you can buy the first 6 units of x at 1/2 price; extra units sell for the regular price.
     
Group 3 a. Blue Inflation doubles the price of x and the price of y.
b. Orange The price of x falls by 50%, and the price of y rises by 50%.
c. White The government offers vouchers for you to acquire the first 4 units of x for free; extra units sell for the regular price.


a. ____________________       b. ___________________        c. ___________________