John earns $4,800 per month. He spends all of his money on two goods, A and B. The price of good A is $240, and the price of good B is $400.
Identify the intercepts of John's budget constraint if good A is plotted on the x-axis and good B is plotted on the y-axis.
A. 10 units of good A on the x-axis and 8 units of good B on the y-axis
B. 8 units of good A on the x-axis and 20 units of good B on the y-axis
C. 20 units of good A on the x-axis and 12 units of good B on the y-axis
D. 18 units of good A on the x-axis and 45 units of good B on the y-axis
The slope of John's budget constraint is. (Round your response to two decimal places. Use a negative sign if you are entering a negative number.)
Ria has an income of $1,200. She consumes two types of goods, shoes and handbags. Suppose the price of a pair of shoes is $400, and the price of a handbag is $200.
What is the opportunity cost of each good?
A. The opportunity cost of a pair of shoes is 2 handbags, and the opportunity cost of a handbag is 1/2 pair of shoes.
B. The opportunity cost of a pair of shoes is 4 handbags, and the opportunity cost of a handbag is 1 pair of shoes.
C. The opportunity cost of a pair of shoes is 4 handbags, and the opportunity cost of a handbag is 2 pairs of shoes.
D. The opportunity cost of a pair of shoes is 2 handbags, and the opportunity cost of a handbag is 1 pair of shoes.
