This Graph Shows Three Different Budget Constraints: A,B,and C

question 128

Multiple Choice

This graph shows three different budget constraints: A,B,and C.
If Don has budget constraint C in the graph shown,what is the trade-off he faces in terms of the two goods?

• A)Two cases of soda for every three gallons of milk
• B)One case of soda for every one and a half gallons of milk
• C)Three cases of soda for every four and a half gallons of milk
• D)All of these accurately reflect Don's tradeoff.

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Definitions:

CD

Compact Disc, a digital optical disc data storage format used for storing digital data, traditionally audio recordings.

California Edison

A major public utility company serving much of California, primarily involved in the generation and distribution of electricity.

Investment

The allocation of resources, usually financial, into assets with the expectation of generating income or profit in the future.

Saving Rate

The proportion of disposable income that is saved by individuals or households over a period, rather than being spent.