Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point C is
A. an available option and Mr. Lingle exactly spends all of his income.
B. not in Mr. Lingle's opportunity set but is on his budget constraint.
C. an available option and Mr. Lingle does not spend all of his income.
D. not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Answer: A
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A) the quantity demanded equals the quantity supplied. The product will then no longer be scarce. B) quantity demanded equals quantity supplied. The market price will then equal the equilibrium price. C) only wealthy consumers will be able to afford the product. D) quantity demanded equals quantity supplied. The equilibrium price will then be greater than the market price.
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What will be an ideal response?
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