Suppose That Candies Are Usually Sold at $0

question 73

Multiple Choice

Suppose that candies are usually sold at $0.05 each. The local candy store offers 2 extra candies for free upon purchase of any 10 pieces. Suppose that Laurel gets an allowance of $3.00 per week. Which of the following is a false statement about her budget constraint if Laurel may consume either candy, x, measured on the horizontal axis or a composite good, y, measured on the vertical axis and priced at $1.00 per unit?

• A)The maximum number of candies Laurel can purchase is 72.
• B)The budget constraint has horizontal segments.
• C)The budget constraint is a straight line with a negative slope.
• D)With normally shaped preferences, Laurel will never refuse the free candies.

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