Suppose you have a part-time job and earn $400 a month. Suppose you decide to spend your income buying new shoes and jeans. The chart below shows the possible combinations that could be purchased in a month. Assume jeans cost $50 each and shoes cost $100 each.

Budget

$400

400

400

400

400

Pairs of Shoes

Purchased

4

3

2

1

0

Pairs of Jeans

Purchased

0

2

4

6

8

The table above shows that for a given budget if you increase the amount of one type of good that you buy, you must ____ (increase, not change, decrease) the amount of the other good that you buy. Therefore, a budget constraint implies that the consumer faces ____ (trade-offs, fixed consumption, rising benefits).

Points: 0 of 1 Save K A budget constraint represents A. the maximum amount of spending the federal government is allowed to do by law. B. any actions taken by government officials to limit the amount of government spending. C. the total amount of income a family earns from all sources. D. the bundles of goods or activities that a consumer can choose given her limited budget. Suppose you have a part-time job and earn $400 a month. Suppose you decide to spend your income buying new shoes and jeans. The chart below shows the possible combinations that could be purchased in a month. Assume jeans cost $50 each and shoes cost $100 each. Pairs of Shoes Pairs of Jeans Budget Purchased Purchased $400 400 400 O - NWA CO O AN 400 400 The table above shows that for a given budget if you increase the amount of one type of good that you the amount of the other good that you buy. Therefore, a budget constraint buy, you must implies that the consumer faces trade-offs fixed consumption rising benefits