Reference: Ref 23-2 (Figure: Coffee and Comic Books) Refer to the figure. A consumer has $5 to spend on comic books (priced at $1 per comic book) and coffee (priced at $1 per cup). Using the figure, how many comic books and cups of coffee will this consumer purchase?

Question

Quizplus · Accepted Answer

With a budget of $5, the consumer can purchase a combination of 2 comic books and 3 cups of coffee, which will cost a total of $5. This is the point where the budget line intersects with the indifference curve representing the consumer's preferences. Any point outside of this intersection would mean the consumer is not spending their entire budget, and any point inside of the intersection would mean the consumer is overspending their budget. Therefore, the best choice for the consumer is 2 comic books and 3 cups of coffee.

Reference: Ref 23-2 (Figure: Coffee and Comic Books) Refer to the Figure