II the comsumer\'s budget constraint is given by 10F + 50S-1000 where F is food
ID: 1136470 • Letter: I
Question
II the comsumer's budget constraint is given by 10F + 50S-1000 where F is food and S is shelter, how much food can he bay if he purchases 2 units of shelter? O 10 O 50 O 90 o 1000 QUESTION 3 If the consumer's budget constraint i given by 10F + S0S- 1000 where F is food and S in shelter, what i the apportusity cest of food ia terms of shelter (Note that shelter is on the vertical axis and food on the horizontal axis) O 2/5 O 25 Cliek Save and Submit to save and submit. Clik Save AllAvrs to sove all enanvers O Type here to search 8Explanation / Answer
1. budget constraint= 10F + 50S =1000
If he buys 2 units of shelter, put S = 2 in the budget constraint
10F + 50*2 = 1000
10F = 1000 - 100
10F = 900
F = 90
so he can buy 90units of food.
correct ans is c) 90.
2. To find opportunity cost first we will find the units of foods he could buy when 0 unit of shelter is consumed.
10F+ 50*0 = 1000
F =100
now we will find the unitsof shelter he could buy when he consume 0 unit of food.
10*0 + 50*S =1000
S = 20
It means to get 100 units of food he has to sacrifice 20 units of shelter
so the opportunity cost of food = 20/100 = 1/5 units of shelter.
correct ans is a) 1/5