Figure: Kristin's Budget Line
(Figure: Kristin's Budget Line) Look at the figure Kristin's Budget Line.The price of a cup of cappuccino is $3, and the price of an apple is $1.Kristin's income is equal to:

Question

Quizplus · Accepted Answer

The slope of Kristin's budget line is -3, which means that for each cup of cappuccino she purchases, she must give up the opportunity to purchase 3 apples. At the point where the budget line intersects the vertical axis, Kristin could purchase 20 apples (since each apple costs $1 and she has $20 to spend). At the point where the budget line intersects the horizontal axis, Kristin could purchase 6 and 2/3 cups of cappuccino. To find Kristin's income, we can calculate the midpoint of the line segment connecting these two points: 
[(6.67/2) * 3] + [(20/2) * 1] = $20 
Therefore, Kristin's income is $20.