Marc has a budget of $20 a month to spend on lattes and e-books. The price of
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Marc has a budget of $20 a month to spend on lattes and e-books. The price of latte is $5 a bottle, and the price of an e-book is $10. Figure A13.4 illustrates his preferences. Use Figure A13.4 to work Problems.
What is the relative price of latte in terms of e-books and what is the opportunity cost of a latte? Draw a graph of Marc’s budget line with e-books on the x-axis.
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The relative price of a latte is 5 a latte 10 an ebook which is 12 of ...View the full answer
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