Tonya, who is rich, and Jerome, who is poorer, both buy orange juice and croissants for lunch at the student cafeteria. Their budget constraints on a diagram with orange juice on the vertical axis and croissants on the horizontal have the same

Question

Quizplus · Accepted Answer

The slope of the budget constraint represents the rate at which one good can be substituted for another while staying within the budget. Since both Tonya and Jerome face the same prices for orange juice and croissants, their budget constraints will have the same slope.

Tonya, Who Is Rich, and Jerome, Who Is Poorer, Both