Suppose a consumer buys pizza (P) and soft drinks (S). The price of pizza is $10, the price of soft drinks is $2 and the consumer's income is $100. If pizza is measured on the vertical axis and soft drinks are measured on the horizontal axis, then the consumer's budget constraint is given by:

A. P = 10 - (1/5)S

B. S = 10 - (1/5)P

C. P = 100 - 5S

D. P = 10 - 5S


A. P = 10 - (1/5)S

Economics

You might also like to view...

A firm becomes a multinational enterprise when

A) it lists its stock on a stock exchange other than the one in its home country. B) it undertakes foreign direct investment. C) it undertakes foreign portfolio investment. D) Any of the above.

Economics

Suppose an economy is in equilibrium. Also suppose that consumer expectations change as the threat of war increases the likelihood of an increase in taxes. This would result in:

a. an increase in equilibrium income. b. no change in equilibrium income. c. a downward shift of the aggregate supply curve. d. a decrease in equilibrium income. e. a change in the slope of the aggregate supply curve.

Economics

Lanny is attempting to determine his firm’s economic profits for the previous year. He already knows what its accounting profits were. To calculate its economic profits, Lanny also needs to know the firm’s ______ for the previous year.

a. economic income b. implicit costs c. marginal benefits d. explicit losses

Economics

International trade has the potential to ____ the availability of goods and services to ____.

A. increase; those nations who export more than they import B. increase; nations that have an absolute advantage in the production of a good or service C. increase; all nations D. decrease; all nations

Economics