Suppose a consumer has an income equal to I which he/she spends on either food or clothing. The price of food is given by $P _ { f }$ and the price of clothing is given by $P _ { c }$. Assume the consumer spends all of their income on clothing. If food is on the $x$-axis and clothing is on the $y$-axis, the consumer is at the:
A) point of maximum indifference.
B) $y$-intercept.
C) interior of the budget constraint.
D) origin.

Question

Quizplus · Accepted Answer

When a consumer spends all of their income on clothing, they are at the point on the budget line where no money is spent on food, which corresponds to the $y$-intercept on a graph where food is on the $x$-axis and clothing is on the $y$-axis.

Suppose a Consumer Has an Income Equal to I Which PfP _ { f }Pf​

Suppose a Consumer Has an Income Equal to I Which $P _ { f }$