Vedant arrived on campus at the beginning of the academic year with $720 to spend on textbooks and CDs. The price of a textbook is uniformly $80 and the price of a CD is always $20. His parents made a deal with him after he spent $240 of his own money on textbooks, they would split the cost of any additional textbooks with him.

 

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a. Draw Vedant's budget constraint with textbooks on the y-axis. Label the y- and x- intercepts. b. At what point does his budget constraint "kink"? What is the slope of the budget constraint to the left and right of the kink point? a. Draw Vedant's budget constraint with textbooks on the y-axis. Label the y- and x- intercepts. b. At what point does his budget constraint "kink"? What is the slope of the budget constraint to the left and right of the kink point?

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