Answer the following questions based on the table. A consumer is able to consume the following bundles of rice and beans when the price of rice is $2 and the price of beans is $3.
a.How much is this consumer's income?
b.Draw a budget constraint given this information. Label it B.
c.Construct a new budget constraint showing the change if the price of rice falls $1. Label this C.
d.Given the original prices for rice ($2) and beans ($3), construct a new budget constraint if this consumer's income increased to $48. Label this D.
Definitions:
Acid-Test Ratio
A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets.
Working Capital
Current assets less current liabilities.
Current Ratio
A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.
Marketable Securities
Short-term investments that are easily convertible into cash, typically within one year.
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