Suppose a consumer has an income of $800 per month and that she spends her entire income each month on beer and bratwurst. The price of a pint of beer is $5, and the price of a bratwurst is $4. Which of the following combinations of beers and bratwursts represents a point that would lie to the interior of the consumer's budget constraint?
A)160 beers and 200 bratwursts
B)40 beers and 50 bratwursts
C)80 beers and 100 bratwursts
D)160 beers and 0 bratwursts

Question

Quizplus · Accepted Answer

The consumer's budget constraint is given by the equation 5B + 4W = 800, where B is the number of beers and W is the number of bratwursts. Option B, with 40 beers and 50 bratwursts, costs 5(40) + 4(50) = 200 + 200 = 400, which is less than the total budget of $800, thus lying within the budget constraint.

Suppose a Consumer Has an Income of $800 Per Month