The diagram shows Sam's budget line. Which of the following combinations of gasoline and coffee are available to Sam?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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The diagram shows Sam's budget line. Which of the following combinations of gasoline and coffee are available to Sam?

The graph is a downward-sloping straight line that represents Sam's budget constraint. The vertical axis is labeled "Gasoline (gallons per week)" and ranges from 0 to 40 gallons. The horizontal axis is labeled "Coffee (pounds per week)" and ranges from 0 to 24 pounds.

The line intersects the vertical axis at 40 gallons of gasoline, indicating that if Sam spends all their resources on gasoline, they can purchase up to 40 gallons without buying any coffee. The line intersects the horizontal axis at 20 pounds of coffee, indicating that if Sam spends all their resources on coffee, they can purchase up to 20 pounds of coffee without buying any gasoline.

The graph has points marked along the line at the intersections with the grid, showing possible combinations of gasoline and coffee Sam can purchase.

Options provided below the graph are:
- A: 40 gallons of gasoline and 0 pounds of coffee.
- B: 32 gallons of gasoline and 4 pounds of coffee.
- C: 8 gallons of gasoline and 8 pounds of coffee.
- D: 16 gallons of gasoline and 16 pounds of coffee.
- E: All combinations except (D) are available to Sam.
Transcribed Image Text:The diagram shows Sam's budget line. Which of the following combinations of gasoline and coffee are available to Sam? The graph is a downward-sloping straight line that represents Sam's budget constraint. The vertical axis is labeled "Gasoline (gallons per week)" and ranges from 0 to 40 gallons. The horizontal axis is labeled "Coffee (pounds per week)" and ranges from 0 to 24 pounds. The line intersects the vertical axis at 40 gallons of gasoline, indicating that if Sam spends all their resources on gasoline, they can purchase up to 40 gallons without buying any coffee. The line intersects the horizontal axis at 20 pounds of coffee, indicating that if Sam spends all their resources on coffee, they can purchase up to 20 pounds of coffee without buying any gasoline. The graph has points marked along the line at the intersections with the grid, showing possible combinations of gasoline and coffee Sam can purchase. Options provided below the graph are: - A: 40 gallons of gasoline and 0 pounds of coffee. - B: 32 gallons of gasoline and 4 pounds of coffee. - C: 8 gallons of gasoline and 8 pounds of coffee. - D: 16 gallons of gasoline and 16 pounds of coffee. - E: All combinations except (D) are available to Sam.
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