Javier loves snacks and spends $100/week on them (so I = $100 for this problem).

ID: 1139766 • Letter: J

Question

Javier loves snacks and spends $100/week on them (so I = $100 for this problem).
Candy costs $10/pound and nuts cost $10/pound, and Javier can buy fractions of pounds if he
wants. Here’s the great news for Javier: the candy store has a deal where if he buys 4 pounds of
candy, he gets his next pound for free! The nut store doesn’t have any such deal. Which of the
following captures Javier’s budget constraint over candy and nuts?

(2, 10) (0, 10) (0.10)* Xc (12,0) (12, 0) (0. 10) (0, 10) (5,6) (4.6) (10,2) (9, 2) (8,2) (12, 0) (12. 0)

Explanation / Answer

Graph c is correct

The horizontal part of the budget line shows free candy that is when price of candy is 0. Budget line becomes flat for free units for candies.

After 4 units of candy it becomes flat for another unit of candy, then after 8+1= 9th unit of candy it again becomes flat for another unit of candy.

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Javier loves snacks and spends $100/week on them (so I = $100 for this problem).

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Explanation / Answer

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