Exhibit 21-7

-Refer to Exhibit 21-7.For graph (2),if the price of X is $60,what is the consumer's income?

Question

Exhibit 21-7
 
-Refer to Exhibit 21-7.For graph (2),if the price of X is $60,what is the consumer's income?

Quizplus · Accepted Answer

From graph (2), if the price of X is $60, the quantity demanded by the consumer is 30 units. Therefore, the total expenditure on good X will be $60 × 30 = $1800. From graph (1), at $1800 expenditure, the consumer's budget line intersects the Y-axis at $3000. Therefore, the consumer's income is $3000. So, the correct answer is C.

Exhibit 21-7 -Refer to Exhibit 21-7.For Graph (2),if the Price of X