Question 26
MediumOriginal questionA consumer's income falls from ₹200 to ₹150 while P₁ = ₹10 and P₂ = ₹5 stay fixed. The good-2 intercept of the budget line moves from
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
Good-2 intercept = M ÷ P₂: 200 ÷ 5 = 40 before, 150 ÷ 5 = 30 after.
Worth noting
20 to 15 is the good-1 intercept (M ÷ ₹10).
- Concept
- New intercept after an income change
- Typical timeTypical
- 70 s
- Your timeYours
- —
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