Suppose you only consume food and clothing, and clothing is plotted on the vertical axis. also, you purchase food at a fixed price (pf), but the price of clothing declines as you buy in larger quantities (i. e., quantity discounts). what does the budget line look like in this case?

You are in the market for a new refrigerator for your company’s lounge, and you have narrowed the search down to two models. the energy efficient model sells for $700 and will save you $45 at the end of each of the next five years in electricity costs. the standard model has features similar to the energy efficient model but provides no future saving in electricity costs. it is priced at only $500. assuming your opportunity cost of funds is 6 percent, which refrigerator should you purchase