Figure: Budget Lines for Oranges and Apples

question 423

Essay

Figure: Budget Lines for Oranges and Apples
(Figure: Budget Lines for Oranges and Apples) Look at the figures 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 of the charts shows what will happen to his budget line if the price of an orange falls to $0.25?
A.Chart A
B.Chart B
C.Chart C
D.Chart D

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Definitions:

Quantity Supplied

The amount of a product or service that producers are willing and able to sell at a given price level during a specific time period.

Inelastic Demand

A market situation in which the demand for a product does not significantly change with its price increase or decrease.

Total Revenues

The entire amount of income generated by a company from its business activities, before any expenses are subtracted.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and loan payments.