Bruno can spend his income two different goods: beyonce CDS and notebooks for hi

Question

Bruno can spend his income two different goods: beyonce CDS and notebooks for his class notes. For each of the following three situations, decide if the given consumption bundle is within bruno's consumption possibilities. Then decide if it lies on the budget line or not.

A) CDs cost $10 each, and notebooks cost $2 each. Bruno ha income of $60. He is considering a consumption bundle containing 3 CDs and 15 Notebooks.

B) CDs cost $10 each, and notebooks cost $5 each. Bruno has income of $110. He is considering a consumption bundle containing 3 CDs and 10 notebooks.

C) CDs cost $20 each, and notebooks cost $10 each. Bruno has income of $50. He is considering a consumption bundle containing 2 CDs and 2 notebooks.

Explanation / Answer

A) CDs cost $10 each, and notebooks cost $2 each. Bruno ha income of $60. He is considering a consumption bundle containing 3 CDs and 15 Notebooks. To solve this we write the equation (3*10) for CD's+(15*2)for notebooks=60 since this equals his budget this is on the budget line. B) CDs cost $10 each, and notebooks cost $5 each. Bruno has income of $110. He is considering a consumption bundle containing 3 CDs and 10 notebooks. To solve this we write the equation (3*10) for CD's+(10*5)for notebooks=80 since this is less than his budget this is not on the budget line and is within his constraints. C) CDs cost $20 each, and notebooks cost $10 each. Bruno has income of $50. He is considering a consumption bundle containing 2 CDs and 2 notebooks To solve this we write the equation (2*20) for CD's+(10*2)for notebooks=60 since this is more than his budget this is not on the budget line and is not within his constraints.

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.