**Transcribed Text for Educational Website:**"In looking at the diagram above, if the consumer has an income of $40, then the absolute price of a banana is _____ and the opportunity cost of a banana is _____."**Diagram Explanation:**The graph displays a budget constraint illustrating the trade-off between the consumption of apples and bananas. The vertical axis represents the quantity of Apples, with markings from 0 to 40. The horizontal axis represents the quantity of Bananas, marked from 0 to 20. A straight downward-sloping line connects the maximum points on each axis, indicating the trade-off rate between apples and bananas. Two red points mark specific combinations of apples and bananas along the constraint: - The first point is at approximately 10 Bananas and 30 Apples.- The second point is at approximately 15 Bananas and 20 Apples.**Multiple Choice Options:**- $20; 40 apples- $1; 2 bananas- $2; 2 apples- $2; 0.5 apples

Income = 40According to the graph if he buys only bananas then he received 20 units of banana Now Price of banana is calculated as Price of Banana = Income/Quantity Price of Banana = 40/20 Price of Banana = 2Opportunity cost refers to the next best alternative forgone Opportunity cost = Change in Banana/Change in apple Opportunity cost = (15-10)/(20-10) Opportunity cost = 5/10 Opportunity cost = 0.5Therefore Option "d" is correct

Answered: In looking at the diagram above, if the…

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Economics

In looking at the diagram above, if the consumer has an income of $40, then the absolute price of a banana is and the opportunity cost of a banana is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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