Tonya's budget constraint for gasoline (G) and clothes (C) each month can be expressed with the...
| Tonya's budget constraint for gasoline (G) and clothes (C) each month can be expressed with the equation G = 100 – 2C. If the price of clothing is $10, which of the following consumption bundles lies INSIDE Tonya's budget line? | |||||||||
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Homework Answers
Answer
Option 3
10 units of clothing and 5 units of gasoline
the budget equation is
G=100-2C
C=0
G=100-2*0=100
the first option is on the line
G=100-2*50=0
the second option is above budget line
G=100-10*2=80 but required 5 units
so the bundle lies inside of it.
G=100-2*50=0
lies on the line
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