Gina has US$6 per day to purchase lunch. She spends all of her lunch money on pizza and iced tea. The price of pizza is US$2 per slice and iced tea costs US$1 per bottle.
a. Draw Gina's budget constraint. Put Pizza on the horizontal axis and Iced tea on the vertical axis. Be sure to identify the intercept values.
b. If the price of iced tea rises to US$1.20 per bottle, show what will happen to her budget constraint in your diagram. Be sure to indicate any new intercept values.

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The Answer of Gina has US$6 per day to purchase lunch. She spends all of her lunch money on pizza and iced tea. The price of pizza is US$2 per slice and iced tea costs US$1 per bottle.
a. Draw Gina's budget constraint. Put Pizza on the horizontal axis and Iced tea on the vertical axis. Be sure to identify the intercept values.
b. If the price of iced tea rises to US$1.20 per bottle, show what will happen to her budget constraint in your diagram. Be sure to indicate any new intercept values.

Gina Has US$6 Per Day to Purchase Lunch