George spends his income on gasoline and other goods. (a) First, draw a budget constraint, with gasoline
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Question:
George spends his income on gasoline and “other goods.”
(a) First, draw a budget constraint, with gasoline on the horizontal axis.
(b) Suppose now that, in response to a gasoline shortage in the economy, the government imposes a ration on each individual that limits the purchase of gasoline to an amount less than the gasoline intercept of the budget constraint. Draw the new effective budget constraint.
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ISBN: 978-0538470841
4th edition
Authors: Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark zimbelma
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