If Don has budget constraint C in the graph shown, what is the trade-off he faces in terms of the two goods?

This graph shows three different budget constraints: A, B, and C.





A. Two cases of soda for every three gallons of milk

B. One case of soda for every one and a half gallons of milk

C. Three cases of soda for every four and a half gallons of milk

D. All of these accurately reflect Don's tradeoff.


D. All of these accurately reflect Don's tradeoff.

Economics

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A) are not reflected in market prices, so they can be a source of economic inefficiency. B) do become reflected in market prices, so they can be a source of economic inefficiency. C) are not reflected in market prices, so they do not adversely affect economic efficiency. D) do become reflected in market prices, so they do not adversely affect economic efficiency. E) may or may not become reflected in market prices, but do not have an impact on economic efficiency in either event.

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