Suppose that price of good X falls by 50 % while price of Y falls by 25% and Income falls by 50%. Then which of the following is correct? Budget line becomes steeper and consumer is not able to afford some bundles that were affordable before. Budget line becomes flatter and consumer is not able to afford some bundles that were affordable before. Budget line becomes steeper and consumer is able to afford new bundles that were not affordable before. Budget line becomes flatter and consumer is able to afford new bundles that were not affordable before.
Suppose that price of good X falls by 50 % while price of Y falls by 25% and Income falls by 50%. Then which of the following is correct? Budget line becomes steeper and consumer is not able to afford some bundles that were affordable before. Budget line becomes flatter and consumer is not able to afford some bundles that were affordable before. Budget line becomes steeper and consumer is able to afford new bundles that were not affordable before. Budget line becomes flatter and consumer is able to afford new bundles that were not affordable before.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section6.A: Appendix: Indifference Curves And Utility Maximization
Problem 2AQ
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