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2 3 CHAPTER 21 THE THEORY OF CONSUMER CHOICE § Two goods: pizza and Pepsi § A “consumption bundle”is , 40 pizzas & 300 pints of Pepsi. § Budget constraint : The consumer’s income: $1000 Prices: $10 per pizza, $2 per pint of Pepsi A. If the consumer spends all his income on pizza, how many pizzas does he buy? B. If the consumer spends all his income on Pepsi, how many pints of Pepsi does he buy? C. If the consumer spends $400 on pizza, how many pizzas and Pepsis does he buy? D. Plot each of the bundles from parts A-C on a diagram that measures the quantity of pizza on the horizontal axis and quantity of Pepsi on the vertical axis, then connect the dots. 4 5 0 100 200 300 400 500 020406080100 Pizzas Pepsis
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