The X-intercept of the budget constraint represents
A)how much of good Y can be purchased if no good X is purchased and all income is spent.
B)how much of good X can be purchased if no good Y is purchased and all income is spent.
C)total income divided by the price of X.
D)b and c.

Question

Quizplus · Accepted Answer

The X-intercept of the budget constraint represents both how much of good X can be purchased if no good Y is purchased and all income is spent (B), and it is calculated by dividing the total income by the price of X (C).

The X-Intercept of the Budget Constraint Represents