Consider a consumer in a perfectly competitive market. The consumer has income 1=200 and can purchase good 1 and good 2. Quantities are q1 and q2, while prices are p₁ and p2. Suppose prices are p1=25 and p2=20. With quantity q2 on the vertical axis and quantity q1 on the horizontal axis, draw the consumer's budget line. The budget line crosses the vertical axis at q2= The budget line crosses the horizontal axis at q1= Compute the slope of the budget line. The absolute value of this slope is If the consumer's income decreases to l'=100, then the budget line will

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Consider a consumer in a perfectly competitive market.
The consumer has income I=200 and can purchase good 1 and good 2. Quantities are q₁ and 92, while prices are p₁ and p2. Suppose
prices are p1=25 and p2=20.
With quantity q2 on the vertical axis and quantity q1 on the horizontal axis, draw the consumer's budget line.
The budget line crosses the vertical axis at q2=
The budget line crosses the horizontal axis at q1=
Compute the slope of the budget line. The absolute value of this slope is
If the consumer's income decreases to l'=100, then the budget line will
Transcribed Image Text:Consider a consumer in a perfectly competitive market. The consumer has income I=200 and can purchase good 1 and good 2. Quantities are q₁ and 92, while prices are p₁ and p2. Suppose prices are p1=25 and p2=20. With quantity q2 on the vertical axis and quantity q1 on the horizontal axis, draw the consumer's budget line. The budget line crosses the vertical axis at q2= The budget line crosses the horizontal axis at q1= Compute the slope of the budget line. The absolute value of this slope is If the consumer's income decreases to l'=100, then the budget line will
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