The diagram illustrates Sam's budget line for purchasing gasoline and coffee. The budget line represents trade-offs between these two goods, showing what combinations are possible based on Sam's budget.### Graph Explanation:- **Axes:** - The vertical axis represents "Gasoline (gallons per week)," ranging from 0 to 40 gallons. - The horizontal axis represents "Coffee (pounds per week)," ranging from 0 to 20 pounds.- **Budget Line:** - The line is downward sloping from 40 gallons of gasoline (when coffee is 0 pounds) to 20 pounds of coffee (when gasoline is 0 gallons). - It shows the maximum quantities of gasoline and coffee Sam can purchase within his budget.- **Data Points:** - Several dots are plotted on the budget line at regular intervals, indicating specific combinations of gasoline and coffee that Sam can afford each week.### Question:Which of the following combinations of gasoline and coffee are available to Sam?#### Options:- **A.** 40 gallons of gasoline and 0 pounds of coffee.- **B.** 32 gallons of gasoline and 4 pounds of coffee.- **C.** 8 gallons of gasoline and 8 pounds of coffee.- **D.** 16 gallons of gasoline and 16 pounds of coffee.- **E.** All combinations except (D) are available to Sam.**Interpretation:** The graph suggests that options A, B, and C lie on the budget line, while option D does not. Thus, options A, B, and C are possible purchases within the given budget constraints, confirming that option E is correct.

Budget line shows the points of combination of two goods which cost equals to the consumer's income. The right option is E, All combination except (D) are available for sam. Option A and B are on the budget line C is below the budget line because C is an inferior good.

Answered: The diagram shows Sam's budget line.…

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The diagram shows Sam's budget line. Which of the following combinations of gasoline and coffee are available to Sam?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The diagram illustrates Sam's budget line for purchasing gasoline and coffee. The budget line represents trade-offs between these two goods, showing what combinations are possible based on Sam's budget.

### Graph Explanation:
- **Axes:**
- The vertical axis represents "Gasoline (gallons per week)," ranging from 0 to 40 gallons.
- The horizontal axis represents "Coffee (pounds per week)," ranging from 0 to 20 pounds.

- **Budget Line:**
- The line is downward sloping from 40 gallons of gasoline (when coffee is 0 pounds) to 20 pounds of coffee (when gasoline is 0 gallons).
- It shows the maximum quantities of gasoline and coffee Sam can purchase within his budget.

- **Data Points:**
- Several dots are plotted on the budget line at regular intervals, indicating specific combinations of gasoline and coffee that Sam can afford each week.

### Question:
Which of the following combinations of gasoline and coffee are available to Sam?

#### Options:
- **A.** 40 gallons of gasoline and 0 pounds of coffee.
- **B.** 32 gallons of gasoline and 4 pounds of coffee.
- **C.** 8 gallons of gasoline and 8 pounds of coffee.
- **D.** 16 gallons of gasoline and 16 pounds of coffee.
- **E.** All combinations except (D) are available to Sam.

**Interpretation:**
The graph suggests that options A, B, and C lie on the budget line, while option D does not. Thus, options A, B, and C are possible purchases within the given budget constraints, confirming that option E is correct.

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