Question
Kyle eats two types of fruits- bananas and apples. He has a budget of $50 to spend on fruits per month. The price of bananas
Kyle eats two types of fruits- bananas and apples. He has a budget of $50 to spend on fruits per month. The price of bananas is $5 and that of apples is $10.
a. Graph Kyle's budget line by plotting bananas on the horizontal axis, and find the slope of his budget line.
b. Write down the budget equation for Kyle's consumption of fruits(bananas on the horizontal axis).
c. Suppose the price of bananas has doubled. Present this effect graphically and find his new slope of the new budget line (bananas on the horizontal axis).
d. Suppose Kyle now reduces. the budget spent on fruits to $40. Present this effect graphically and find his new slope of the new budget line (bananas on the horizontal axis, and price of bananas is $5 and that of apples is $10).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started