A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10

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A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10 and price of shoes is $ 20. Assume the consumers budget line has shoes on the vertical axis and sweaters on the horizontal axis;

a. Determine the slope and the intercept of the budget line

b. What will be the effect of the following on the budget line:

Increase in price of sweaters

Increase in income of consumer

If price of a shoes decreases to $ 10 what is the new intercept of the budget line

Related Book For answer-question

Managerial Economics and Business Strategy

ISBN: 978-0071267441

7th Edition

Authors: Michael R. baye

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Posted Date: Mar 02, 2024 10:33 AM

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A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10

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a To determine the slope and intercept of the budget line we can use the formula for a straight line ... View the full answer

Managerial Economics and Business Strategy

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