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Suppose There Are Only Two Goods,food and Clothing,with Food Measured

Question 96

Multiple Choice

Suppose there are only two goods,food and clothing,with food measured on the vertical axis.If the price of clothing changes,holding all else constant,


A) the budget line undergoes a parallel shift to the right
B) the budget line undergoes a parallel shift to the left
C) a new point of utility maximization will be reached
D) the budget line becomes flatter
E) the slope of the budget line remains constant

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