Suppose the price of pizza is $10, the price of cola is $1, and the consumer's income is $60. In addition, suppose the consumer's budget constraint measures pizza on the horizontal axis and cola on the vertical axis. Refer to Scenario#1. If the price of cola doubles to $2 while both the price of pizza is constant at $10 and the income is constant at $60, then the slope of the budget constraint rises to -5/2 budget constraint intersects the horizontal axis 5 pizzas budget constraint intersects the vertical axis 30 colas budget constraint intersects the horizontal axis at 25 pizzas
Suppose the price of pizza is $10, the price of cola is $1, and the consumer's income is $60. In addition, suppose the consumer's budget constraint measures pizza on the horizontal axis and cola on the vertical axis. Refer to Scenario#1. If the price of cola doubles to $2 while both the price of pizza is constant at $10 and the income is constant at $60, then the slope of the budget constraint rises to -5/2 budget constraint intersects the horizontal axis 5 pizzas budget constraint intersects the vertical axis 30 colas budget constraint intersects the horizontal axis at 25 pizzas
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section6.A: Appendix: Indifference Curves And Utility Maximization
Problem 2AQ
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