{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Ch11Figures

# Ch11Figures - Ch 11 Figures Figure 11.1 Your Budget Line...

This preview shows pages 1–4. Sign up to view the full content.

Ch 11 Figures Figure 11.1 Your Budget Line The bundles listed in the table are all exactly affordable with your weekly income of \$72 and market prices of \$3 per gallon of gasoline and \$2 per slice of pizza. These bundles are graphed to show your budget line. All of the bundles on the budget line spend exactly all of your income. If you want to buy more pizza, you must buy less gas. Specifically, buying 4 fewer gallons of gas frees up \$12 that can purchase 6 additional slices of pizza. This is illustrated by comparing the bundle of 16 gallons of gas and 12 slices of pizza to the bundle of 12 gallons of gas and 18 slices of pizza. The budget constraint includes all of the bundles on the budget line and inside the budget line. 0 6 12 18 24 30 36 0 4 8 12 16 20 24 Quantity of Gasoline Quantity of Pizza …if you buy 4 fewer gallons of gasoline you can buy 6 more slices of pizza … Gallons of Gasoline Slices of Pizza 0 36 4 30 8 24 12 18 16 12 20 6 24 0

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document