M01 broo6651 1e sg c01


with train miles on the vertical axis and plane miles on the horizontal axis



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Ch03
sol 03, sol 03, Ch07
with train miles on the vertical axis and plane miles on the horizontal axis.
The typical budget line is linear (with a constant slope) because prices do not change. In this case, the price of airline miles changes depending on how many miles Anne purchases. As the price changes, the slope of the budget line changes. Because there are three prices, there will be three slopes (and two kinks) to the budget line. Since the price falls as Anne flies more miles, her budget line will become flatter with each price change.


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Pindyck/Rubinfeld, Microeconomics, Eighth Edition Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

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