Answer to Question #273823 in Microeconomics for ash

Question

Household Consumption and Budget Constraints

Kali lives on mangoes and avocados, Pm = $5, Pa = $10, and her income is $200.

A. Identify her budget constraint equation and illustrate Kali’s budget line on a graph

with eggplants on the horizontal axis and soursop on the vertical axis.

B. Identify and illustrate on a new graph Kali’s new budget constraint if her income

doubled, the price of eggplants doubled, and the price of soursop remained constant.

Answer 1

A. 200=5x+10y

B.

400=10x+10y