-Given the budget line in the above figure, if income is $60, then the price of a pizza is _______ and the price of a CD is _______.
A) $5; $20
B) $10; $15
C) $15; 15
D) $6; $4

Question

-Given the budget line in the above figure, if income is $60, then the price of a pizza is _______ and the price of a CD is _______.
A) $5; $20 
B) $10; $15 
C) $15; 15 
D) $6; $4

Quizplus · Accepted Answer

The budget line represents the combinations of two goods that can be purchased with a given income. If the income is $60 and the budget line shows that the maximum number of pizzas that can be bought is 6, then the price of a pizza is $10 ($60/6). Similarly, if the maximum number of CDs that can be bought is 4, then the price of a CD is $15 ($60/4).

-Given the Budget Line in the Above Figure, If Income