Quantity of cola 600 400 200 300 Quantity of pizza A consumer has a total budget of $800 to spend on pizza and cola. 1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line. 2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his budget line?
Quantity of cola 600 400 200 300 Quantity of pizza A consumer has a total budget of $800 to spend on pizza and cola. 1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line. 2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his budget line?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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