Suppose the consumer have 15 rupees to spend on purchasing two goods namely and where the price of is 2.50 and price of is 1.50 then what is the maximum quantity of and at which the consumer's budget line will intersect the axis of the graph if and are represented in the vertical axis and horizontal axis of the graph respectively.
Suppose the consumer have 15 rupees to spend on purchasing two goods namely and where the price of is 2.50 and price of is 1.50 then what is the maximum quantity of and at which the consumer's budget line will intersect the axis of the graph if and are represented in the vertical axis and horizontal axis of the graph respectively.
Solution
✅ Correct Option: 3
An axis intercept is found by spending the whole income on one good. Maximum on the vertical axis and maximum on the horizontal axis. So the budget line meets the axes at and .
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