Economics budget line help!! Question is below :)

Question

jennychan12 · Answer

Jack has $50 in his wallet. A candy bar costs $2, and an energy drink costs $4. Draw his budget line. i) Suppose the store has a discount on candy bars. The first five candy bars sell for $1 each. Any additional candy bars will be the original price. What will be Jack's new budget line? Compare it with his original. ii) The store now has a promotion on energy drinks. After purchasing 2 cans of energy drink, the store will give a $1 discount on any additional energy drinks. What will be his new budget line? Compare it with the original.

anonymous · Answer

Jack has $50. 

How many candy bars can Jack buy with $50 if he only buys candy bars? He can buy 25 bars, because each costs $2. (50/2 = 25)

Alternatively, how many  energy drinks can Jack buy if he only buys energy drinks? He can buy 12.5, because each energy drink costs $4. (50/4 = 12.5)

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