Antonio's College Textbooks Budget Analysis

What happens to Antonio's budget line when the price of new and used books increases?

Final answer:

Antonio's budget line will shift upwards and become steeper, indicating that he can now afford fewer new books and more used books with the same budget.

Explanation:

When the price of new college textbooks increases by 10% and used books increase by 5%, Antonio's budget line is affected. The new cost of new books will be $88 each and used books will be $52.50 each. As a result, Antonio's budget line will shift upwards and become steeper. This means that with the same budget, Antonio can purchase fewer new books and more used books due to the price increase.

Antonio's father offering him an additional $40 is an indicator of the impact of the price increase on Antonio's ability to purchase books. It demonstrates how changes in prices can influence consumer choices and budget constraints.

Understanding the dynamics of budget lines and how they shift in response to price changes is crucial in analyzing consumer behavior and decision-making. It provides insights into how individuals adjust their purchasing patterns based on changes in prices and available budget.