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Figure: Budget Lines for Oranges and Apples
-(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if his income decreases to $2.50?
A) A
B) B
C) C
D) D

Question

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples 
-(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if his income decreases to $2.50?
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

When Antonio's income decreases to $2.50, he can only afford to buy 10 oranges or 5 apples per month. This reduces his purchasing power, and his budget line will shift inward and become steeper (as represented by line C in the graph). Therefore, the best choice is C.

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