Question

Brenda wants to buy a new car and has a budget of $ 25000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 1 to​ 10, with 10 representing either the most styling or best gas mileage. While looking at the list of​ cars, Brenda observes that on​ average, as the style index increases by one​ unit, the price of the car increases by $ 10000. She also observed that as the​ gas-mileage index rises by one​ unit, the price of the car increases by $ 3125.

Illustrate the various combinations of style​ (S) and gas mileage​ (G) that Brenda could select with her $ 25000 budget.

Using the line drawing tool​, illustrate​ Brenda's budget line. Label this line​ 'Budget Line'.

Carefully follow the instructions​ above, and only draw the required object.

Answer 1

Brenda has a budget of $25,000 to buy the car.

It has been provided that as style index increases by one unit, the price of car increases by $10,000.

Calculate the maximum styling index Brenda can achieve -

Maximum styling index = Total budget/Increase in price of car as styling index increases by one unit

Maximum styling index = $25,000/$10,000 = 2.5

The maximum styling index Brenda can achieve in her budget is 2.5

It has been provided that as gas mileage index rises by one unit, the price of car increases by $3,125.

Calculate the maximum gas-mileage index Brenda can achieve -

Maximum gas-mileage index = Total budget/Increase in price of car as gas-mileage index increases by one unit

Maximum gas-mileage index = $25,000/$3,125 = 8

The maximum gas-mileage index Brenda can achieve in her budget is 8.

Following is the required budget line of Brenda -