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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 $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 the price of an apple rises to $0.50?
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 $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 the price of an apple rises to $0.50?
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

If the price of an apple increases to $0.50, Antonio can now buy only 10 apples with his $5 as compared to 20 apples before. This means he can now buy 10 apples and 10 oranges. Hence, his new budget line will be parallel to the original one but closer to the y-axis, allowing Antonio to purchase fewer apples. This change in the budget line is represented by chart B.

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