Suppose a college student can spend 30 on Subway sandwiches...

Suppose a college student can spend $$\$ 30$$ on Subway sandwiches and Chick-Fil-A sandwiches. The price of a Subway sandwich is $$\$ 5$$ and the price of a Chick-Fil-A sandwich is $$\$3$$. Which of the following diagrams describes the correct budget line for this student? A Subway Sandwiches FIGURE CANT COPY B Subway Sandwiches FIGURE CANT COPY C Chick-Fil-A Sandwiches FIGURE CANT COPY D Chick-Fil-A Sandwiches FIGURE CANT COPY

Suppose a college student can spend $$\$ 30$$ on Subway sandwiches and Chick-Fil-A sandwiches. The price of a Subway sandwich is $$\$ 5$$ and the price of a Chick-Fil-A sandwich is $$\$3$$. Which of the following diagrams describes the correct budget line for this student?
A Subway Sandwiches
FIGURE CANT COPY
B Subway
Sandwiches
FIGURE CANT COPY
C Chick-Fil-A Sandwiches
FIGURE CANT COPY
D Chick-Fil-A Sandwiches
FIGURE CANT COPY

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Key Concepts

Budget Constraint

A budget constraint represents the combinations of goods that a consumer can purchase given a fixed income and the prices of the goods. It defines the feasible set of choices available to the consumer under a limited budget.

Intercepts

Intercepts on a budget line show the maximum quantity of one good that can be bought if the consumer allocates the entire budget to it. These points on the axes help in understanding the extremes of consumption possibilities.

Slope of the Budget Line

The slope of a budget line indicates the opportunity cost of one good in terms of another. It is calculated as the negative ratio of the prices of the two goods and reveals how many units of one good must be forgone to purchase an additional unit of the other good.

Graphical Representation of Constraints

Graphically, a budget line is depicted as a straight line on a graph with each axis representing a different good. The line demarcates the boundary between attainable and unattainable combinations of the goods, providing a visual insight into the consumer’s trade-offs.

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