Assume the Graph Shown Represents Dana's Budget Constraint

question 1

Multiple Choice

Assume the graph shown represents Dana's budget constraint.If Dana's income to spend on these two items decreased,which of the following could be said?

• A) Dana will buy more hairbands now because they are relatively less expensive.
• B) Dana will be able to buy less of both goods.
• C) Dana will derive more utility from each item, because she values each one more now that she's poorer.
• D) All of these are true.

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Definitions:

American Express

A multinational financial services corporation known for its credit card, charge card, and traveler's check businesses.

Utility

The total satisfaction or benefit received from consuming a good or service.

Place Utility

The value added to products by having them available at the location where they are needed or desired by consumers.

Boarding Pass

A document provided by an airline during check-in, granting a passenger permission to enter the secure area of an airport and board a specific flight.