Ollie South has an endowment of 10 guns and 10 pounds of butter. He can buy or sell butter at $1 a pound. But the world market for guns is more complicated: he can buy guns for $5 each, but he can sell guns for only $2. If we graph his budget line with guns on the horizontal axis and butter on the vertical axis, then Ollie's budget line is a straight line
A) joining (12, 0) and (0, 30) .
B) joining (14, 0) and (0, 14) .
C) with slope -through the point (10, 10) .
D) with slope -going through the point (10, 10) .
E) None of the above.
Correct Answer:
Verified
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