Answer to Question #188908 in Microeconomics for Kuhle

Question #188908

Given that Rumbi's budget line is 25=1/4Qcake+Qtea and the price of tea is R10. What is Rumbi's income and price for cake?


1
Expert's answer
2021-05-07T03:17:54-0400
Qcake=0Q_{cake}=0

Qtea=25Q_{tea}=25

I=ptea×Qtea=10×25=250I=p_{tea}\times Q_{tea}=10\times25=250

Qtea=0Q_{tea}=0

Qcake=100Q_{cake}=100

pcake=250100=2.5p_{cake}=\frac{250}{100}=2.5


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