Suppose Olivia has an income of $800/week for which she can use to consume two goods: entertainment (E) and other (O). Furthermore, suppose the price per unit of entertainment is $40 and the price per unit of other is $25. Does the following diagram accurately represents Olivia's budget constraint? O (units) 25 E (units) 40

Principles of Economics (MindTap Course List)
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ISBN:9781305585126
Author:N. Gregory Mankiw
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Chapter21: The Theory Of Consumer Choice
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Suppose Olivia has an income of $800/week for which she can use to consume two
goods: entertainment (E) and other (O). Furthermore, suppose the price per unit of
entertainment is $40 and the price per unit of other is $25. Does the following
diagram accurately represents Olivia's budget constraint?
O (units)
25
E (units)
40
Yes
No
Transcribed Image Text:Suppose Olivia has an income of $800/week for which she can use to consume two goods: entertainment (E) and other (O). Furthermore, suppose the price per unit of entertainment is $40 and the price per unit of other is $25. Does the following diagram accurately represents Olivia's budget constraint? O (units) 25 E (units) 40 Yes No
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