1) Consider an economy with two goods--broccoli and peas. Each head of broccoli
ID: 1254057 • Letter: 1
Question
1) Consider an economy with two goods--broccoli and peas. Each head of broccoli costs $2 and each bag of peas costs $1. George has a budget of $20 to spend on broccoli and peas. But George is allergic to broccoli and would never buy it no matter how cheap it was or how much money he had. What is George's budget line if peas are on the horizontal axis and broccoli is on the vertical axis?a)A vertical line that intersects the horizontal axis at 20 bags of peas
b)A horizontal line on the horizontal axis running from 0 bags of peas to 20 bags of peas
c)A straight line connecting the point at 0 heads of broccoli and 20 bags of peas to the point at 10 heads of broccoli and 0 bags of peas
d)A single point at 20 bags of peas and 0 heads of broccoli
Explanation / Answer
A horizontal line on the horizontal axis running from 0 bags of peas to 20 bags of peas
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