Scenario 21-1
Suppose the price of pizza is $10, the price of cola is $1, and the consumer's income is $50. In addition, suppose the consumer's budget constraint measures pizza on the horizontal axis and cola on the vertical axis.
-Refer to Scenario 21-1.If the consumer's income rises to $60,then the budget line for pizza and cola would
A)now intersect the horizontal axis at 6 pizzas and the vertical axis at 60 colas.
B)not change.
C)now intersect the horizontal axis at 4 pizzas and the vertical axis at 16 colas.
D)rotate outward along the cola axis.

Question

Quizplus · Accepted Answer

With an income of $60, the consumer can buy 6 pizzas ($60/$10) or 60 colas ($60/$1), so the budget line intersects the axes at these points.

Scenario 21-1 Suppose the Price of Pizza Is $10, the Price of Price