Assume we are measuring coffee on the horizontal axis and flowers on the vertical axis. The government introduces a tax on coffee consumed beyond C* units. What will happento the budget constraint?O The budget constraint will become kinked at C* units of coffee and will have a flatter slope at units beyond C*.O The budget constraint will pivot inwards around the horizontal intercept.O The budget constraint will pivot outwards around the vertical intercept.O The budget constraint will shift outwards and become steeper.O The budget constraint will become kinked at C* units of coffee and will have a steeper slope at units beyond C*.O No answer.

A budget constraint is a representation of the limitations or boundaries on the consumption choices…

ssume we are measuring coffee on the horizontal axis and flowers on the vertical axis. The government introduces a tax on coffee consumed beyond C units. What will happen the budget constraint? The budget constraint will become kinked at C* units of coffee and will have a flatter slope at units beyond C". The budget constraint will pivot inwards around the horizontal intercept. O The budget constraint will pivot outwards around the vertical intercept. O The budget constraint will shift outwards and become steeper. O The budget constraint will become kinked at C* units of coffee and will have a steeper slope at units beyond C.

ssume we are measuring coffee on the horizontal axis and flowers on the vertical axis. The government introduces a tax on coffee consumed beyond C units. What will happen the budget constraint? The budget constraint will become kinked at C* units of coffee and will have a flatter slope at units beyond C". The budget constraint will pivot inwards around the horizontal intercept. O The budget constraint will pivot outwards around the vertical intercept. O The budget constraint will shift outwards and become steeper. O The budget constraint will become kinked at C* units of coffee and will have a steeper slope at units beyond C.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 5PA

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301 15 Assume we are measuring coffee on the horizontal axis and flowers on the vertical axis. The government introduces a tax on coffee consumed beyond C units. What will happen to the budget constraint? O The budget constraint will become kinked at C* units of coffee and will have O The budget constraint will pivot inwards around the horizontal intercept. O The budget constraint will pivot outwards around the vertical intercept. O The budget constraint will shift outwards and become steeper. O The budget constraint will become kinked at C* units of coffee and will have O No answer. flatter slope at units beyond Cº. steeper slope at units beyond C.
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