Graph 22-3

-Refer to Graph 22-3. Using the figure in panel (a), if income is equal to $120, the price of good Y is:
A) $1.20
B) $2.40
C) $12.00
D) $24.00

Question

Graph 22-3
 
-Refer to Graph 22-3. Using the figure in panel (a), if income is equal to $120, the price of good Y is:
A) $1.20 
B) $2.40 
C) $12.00 
D) $24.00

Quizplus · Accepted Answer

From the figure in panel (a), we can see that at an income of $120, the budget line intersects the Y-axis at a point between $2 and $3. By drawing a vertical line from this point to the graph of good Y, we can see that the price of good Y is approximately $2.40. Therefore, the best choice is option B.

Graph 22-3 -Refer to Graph 22-3. Using the Figure in Panel (A)