Question

Joe's income is $500, the price of food (F) is $2 per unit, and the price of shelter (S) is $100. Which of the following represents his budget constraint?
A) 500 = 2F + 100S.
B) F = 250 - 50S.
C) S = 5 - .02F.
D) All of the above.

Answer 1

Answer:

A) 500 = 2F + 100S.

Explanation:

A budget constraint represents all the combinations of goods and services that can be purchased by a consumer given price and income.

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