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If a Consumer Purchases Two Goods, Food (Measured Along the X-Axisaxis)

Question 49

Multiple Choice

If a consumer purchases two goods, food (measured along the x-axisaxis) and housing (measured along the y axis) , then what happens to the slope of the consumer's budget constraint if the price of food falls?


A) The new budget constraint shifts inward but is parallel to the original budget constraint.
B) The new budget constraint pivots inward (towards the origin) along the x-axis. The new slope is steeper than the original slope.
C) The new budget constraint pivots inward (towards the origin) along the x-axis. The new slope is flatter than the original slope.
D) The new budget constraint pivots outward (away from the origin) along the x-axis. The new slope is flatter than the original slope.

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