Question

Alex has a part-time job and earns 90$ per week. He spends his entire income on two goods: Donuts (which cost 3$ each) and pomegranate juice (which cost 6TL each glass).

A-)Draw Alex's budget constraint. Suppose that Adrian decides to purchase 10 donuts and 8 glasses of pomegranate juices this week. Is this choice within Adrian's opportunity set? Explain and show this choice on your graph.

B-)What is the slope of Alex budget line?

C-) What is the opportunity cost of purchasing a donut?

Answer 1