Draw jerry budget line and clearly label its slope

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Reference no: EM133279206

Question - Jerry lives on milk and cereal. . He can spend all his income on either 40 units of milk or 30 units of cereal. The price of milk is $3 and the price of cereal is $4. Assume milk is X1 and cereal is X2.

a) Draw Jerry's budget line and clearly label its slope, vertical intercept, and horizontal intercept. Indicate Jerry's budget set:

b) Write down the equation corresponding to Jerry's budget line.

c) Suppose the price of milk has risen to $4 and the price of cereal remains the same. How much would Jerry's income have to rise so that he can afford all the consumption bundles that used to be affordable?

Reference no: EM133279206

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