Figure 21-1 The downward-sloping line on the figure represents a consumer's budget
constraint.
-Refer to Figure 21-1. If the consumer's income is $140, then what is the price of a CD?
A)$3
B)$5
C)$7
D)$9

Question

Figure 21-1 The downward-sloping line on the figure represents a consumer's budget
constraint. 
-Refer to Figure 21-1. If the consumer's income is $140, then what is the price of a CD?
A)$3 
B)$5 
C)$7 
D)$9

Quizplus · Accepted Answer

To determine the price of a CD, we need to know the budget constraint equation from Figure 21-1. Assuming the consumer spends all their income on CDs, if the income is $140 and the price of a CD is $7, then the consumer can buy 20 CDs ($140 / $7 = 20).

Figure 21-1 the Downward-Sloping Line on the Figure Represents a Consumer's