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Sarah Has an Income of $100

Question 57

Multiple Choice

Sarah has an income of $100. She purchases 5 pizzas at $10 each and 10 subs at $5 each. Then the government taxes subs, and the price rises to $10 each. Simultaneously, the government gives Sarah a grant of $50 in income to make up for this change. As a result, Sarah's budget line


A) becomes steeper.
B) becomes flatter.
C) shifts leftward and parallel to the original budget line.
D) shifts rightward and parallel to the original budget line.
E) swivels around the original consumption choice.

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