Question 6
MediumOriginal questionA consumer has ₹100. Good 1 costs ₹5 and good 2 costs ₹10. What is the most of good 1 he can buy?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
Spending everything on good 1: M ÷ P₁ = 100 ÷ 5 = 20 units.
This is where the budget line meets the good-1 axis.
Worth noting
10 is the most of good 2 (100 ÷ 10).
- Concept
- Intercept of the budget line
- Typical timeTypical
- 70 s
- Your timeYours
- —
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Ten questions from Budget Line & Optimal Choice, at your own pace.