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?
60=12Qvg+6Qm60=12Qvg+6Qm60=12Qvg+6Qm
12=60Qvg+6Qm12=60Qvg+6Qm12=60Qvg+6Qm
12=6Qvg+60Qm12=6Qvg+60Qm12=6Qvg+60Qm
60=6Qvg+12Qm60=6Qvg+12Qm60=6Qvg+12Qm
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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
What happens if income doubles and all prices double?
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?
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?
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?
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?