Answer to Question #190188 in Microeconomics for Tayyaba

Question

Draw a budget line that represents the set of bundles this individual can afford if they use all their income. (Put movies on the X axis). Label the places where the budget line intercepts each axis and the slope of the line.

Answer 1

Assuming the consumer has an income of 10 and buys soda and movies, the price of each good being one;

The budget line will be as shown below