Asked by
venus de guzman
on Nov 04, 2024Verified
Michael can buy either pizzas or submarine sandwiches. If the prices of pizzas and submarine sandwiches fall by half and so does Michael's money income, we can conclude that Michael's budget constraint will
A) shift in but remain parallel to the old one.
B) shift out but remain parallel to the old one.
C) swivel in so that the slope of the budget constraint is doubled.
D) remain unchanged.
Budget Constraint
The financial limit that defines the combination of goods and services a consumer can purchase with their income.
Submarine Sandwiches
A type of sandwich made from a long roll of bread split widthwise and filled with a variety of meats, cheeses, vegetables, and condiments.
Pizzas
A popular dish made from dough covered with tomato sauce, cheese, and various toppings, often baked in an oven.
- Absorb the framework of budget constraints and the repercussions of income and price changes on the decision-making of consumers.
- Understand the relationship between budget constraints and the consumer's choice set.
Verified Answer
KM
Learning Objectives
- Absorb the framework of budget constraints and the repercussions of income and price changes on the decision-making of consumers.
- Understand the relationship between budget constraints and the consumer's choice set.