Joe's income is $500,the price of food (F)is $2,and the price of shelter (S)is $100.Which of the following bundles is in Joe's opportunity set?

Question

Quizplus · Accepted Answer

Joe's income is $500, and he spends $100 on shelter, leaving him with $400 to spend on food. At a price of $2 per unit of food, he can afford to purchase 200 units of food. However, he still needs to have enough money left to pay for his shelter. The combination of 100 units of food and one unit of shelter costs him $300, leaving him with $200 in income to purchase additional food. Therefore, Joe's opportunity set includes a combination of 100 units of food and one unit of shelter.

Joe's Income Is $500,the Price of Food (F)is $2,and the Price