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Budget Line & Optimal Choice · Question 30 of 67

In the graph, income is ₹100.

Question 30

HardOriginal question

In the graph, income is ₹100. Before the change, good 1 cost ₹5. What does it cost after the budget line moves to AC?

Two budget lines from the same point, 10 units of good 2. AB ends at 20 units of good 1 and AC ends at 25 units of good 1.
Options for question 30

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. On AC, the most of good 1 is 25 units, so P₁ = M ÷ 25 = 100 ÷ 25 = ₹4.

Concept
New price from a new intercept
Typical time
100 s
Your time
—
The rule this testsWhen income or prices change
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Ten questions from Budget Line & Optimal Choice, at your own pace.

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Ten questions from Budget Line & Optimal Choice, at your own pace.

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