Paul has $22.25 of income to spend on two goods, Twinkies (q, ) and Pepsi (a2).Paul cannnot afford a bundle (91 , 92) = (5 , 10) by spending his entire income.If the price of Twinkies is $2.85, then the price of Pepsi isO A. at leastO B. at mostOC.D. equal to(round your answer to two decimal place), and the slope of Paul's budget line (with q1 on horizontal axis) isA. less thanO B. equal toOC.O D. greater than(round your answer to two decimal place).

Paul can afford 5 twinkies worth $2.85 each. It costs him 2.85*5=14.25. The rest of his income is…

Answered: Paul has $22.25 of income to spend on…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.2P

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