Suppose a person has $8.00 to spend only on apples and bananas. Apples cost $.40 each, and bananas cost $.10 each.

a. If this person buys only apples, how many can be bought?

b. If this person buys only bananas, how many can be bought?

c. If the person were to buy 10 apples, how many bananas could be bought with the funds left over?

d. If the person consumes one less apple (that is, nine), how many more bananas could be bought? Is this rate of trade-off the same no matter how many apples are relinquished?

e. Write down the algebraic equation for this person’s budget constraint, and graph it showing the points mentioned in parts a through d (using graph paper might improve the accuracy of your work).