Suppose the price of coffee is $3, the price of a bagel is $2 and a person's budget is $40. The budget line's equation is
A) $2(Qbagel ) + $3(Qcoffee ) = $40.
B) Qbagel /$2 + Qcoffee /$3 = $40.
C) Qbagel + Qcoffee = $40/($3 + $2).
D) $2/Qbagel + $3/Qcoffee = $40.

Question

Quizplus · Accepted Answer

The budget line equation represents the combination of goods that a consumer can purchase given their budget constraints. Option A correctly represents the total spending on bagels and coffee equaling the budget of $40, with $2 per bagel and $3 per coffee.

Suppose the Price of Coffee Is $3, the Price of a Bagel