Bill spends his money on flowers and cookies so as to maximize his total utility. Both flowers and cookies start off costing $2 each. At that price, Bill buys three flowers and two cookies. When the price of flowers is lowered to $1, Bill buys eight flowers and one cookie. Which of the following statements about Bill’s reaction to the price change is not true? a. Bill’s budget line shifted outward when the price of flowers fell. b. Bill moved to a higher indifference curve after the price of flowers fell. c. Bill’s demand curve for flowers shifted to the right. d. Bill’s attainable set was smaller before the price of flowers fell.
Bill spends his money on flowers and cookies so as to maximize his total utility. Both flowers and cookies start off costing $2 each. At that price, Bill buys three flowers and two cookies. When the price of flowers is lowered to $1, Bill buys eight flowers and one cookie. Which of the following statements about Bill’s reaction to the price change is not true? a. Bill’s budget line shifted outward when the price of flowers fell. b. Bill moved to a higher indifference curve after the price of flowers fell. c. Bill’s demand curve for flowers shifted to the right. d. Bill’s attainable set was smaller before the price of flowers fell.
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