Answer to Question #331498 in Microeconomics for Waia

Question

Suppose that a consumer consumes only two products namely Beer and

Hamburgers. The price of Beer is R40 and the price of Hamburgers R120. The

consumer receives a monthly income of R1200.

8.1. Based on the information regarding the price of the two products

consumed by and the monthly income of the consumer, graphically

illustrate the consumers budget line. Let Beer be on the Y-axis and

Hamburgers on the X-axis. Marks will be allocated for the calculated value

of the points of intersection. (4)

8.2. Illustrate by aid of a graph how the budget line will If the price of

Hamburgers decreases from R120 to R100.

Answer 1

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