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Samantha has $2,000 to spend on two goods: sandwiches and beer. The price of a …

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Wize University Microeconomics Textbook > Theory of Consumer Choice

Budget Constraint

2 Activities

Samantha has $2,000 to spend on two goods: sandwiches and beer. The price of a sandwich is $5 and price of a beer is $4. Which diagram represents Samantha's budget line?
More Budget Constraint Questions:
What happens if income doubles and all prices double?
Practice: Budget Line
Henry consumes only two items, movies and video games. His income is $60 per month. Video games are $12 each and movies are $6. What is the equation for his budget line?
Practice: Income & Consumption
Emily has an income of $80 which she plans on spending on milk and cookies. The price of milk is $2 per liter, and the price of cookies is $4 per dozen. If Emily buys 10 dozen cookies how many liters of milk can she buy if she spends all her income?
Suppose the budget line changes, moving to a higher y-intercept than before while maintaining the same x-intercept. Which is the most likely cause for this change?
John consumes two goods, burgers and soda pop. Quantity of burgers consumed is on the x-axis and soda pop is on the y-axis. Suppose that the price of pop increases. The ________ of the budget line will change
Suppose in the diagram below the budget increases from BL1 to BL2. If X is an inferior good and Y is a normal good, which of the following could be a possible point for the new optimal bundle?
Suppose in the diagram below the budget decreases from BL2 to BL1. If the optimal bundle changes from combination D to combination A what can be said about the two products?
A decrease in the price of the good on the y-axis causes
An increase in the price of the good on the x-axis causes
An increase in the price of the good on the x-axis causes
A decrease in the price of the good on the y-axis causes