Let E be the amount in dollars that Eric spends on salad and pizza. If Eric buys S bowls of salad and P slices of pizza, then the total amount of money he spends (E) can be represented by the equation E=$5.00S+$2.00P
Now rearrange the equation you wrote above so that P is written in terms of E and S. The quantity of pizza he buys can be represented by the equation P=E?($5.00×S)$2.00
Suppose Eric has $40.00 to spend on salad and pizza; that is, E=$40.00E=$40.00.
| Budget | Salad | Pizza |
|---|---|---|
| (Dollars) | (Bowls) | (Slices) |
| 40.00 | 0 | 20 |
| 40.00 | 4 | 10 |
| 40.00 | 8 | 0 |
Use the black line (plus symbols) to plot the line illustrating the combinations of salad and pizza that Eric can purchase with a budget of $40.00.
Now suppose Eric income increases by 50%: That is, he has 50% more money to spend than he did before.
On the previous graph, use the blue line (circle symbols) to plot Eric new budget constraint.
Which of the following statements best summarizes the pattern of causality captured by the graph above? Check all that apply.
The relationship between S and P is not a causal relationship.
A change in E causes a shift of the budget constraint.
A change in P causes a change in S.
A change in S causes a change in P.
