George Has a Weekly Income (I)of $50,which He Uses to Purchase

question 48

Multiple Choice

George has a weekly income (I) of $50,which he uses to purchase doughnuts (D) and coffee (C) .If the price of a doughnut is $1 and the price of coffee is $2.50,his budget constraint can be expressed as:

• A)D \(\leq\) 50 + 2.50C.
• B)D \(\leq\) 50 - 25C.
• C)D \(\leq\) 50 - 0.25C.
• D)D \(\leq\) 50 - 2.50C.

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Definitions:

Credit Availability

The ease with which individuals and businesses can obtain loans and other forms of credit from financial institutions.

Liquid Assets

Assets that can be quickly converted into cash with little impact on their value.

Consumption Rate

The proportion of income or resources that is spent on consumption rather than saving.

Savings Rate

The proportion of disposable income that is saved rather than spent on consumption, typically expressed as a percentage.