(Scenario: E-Books and Sports Tickets)Read the scenario E-Books and Sports Tickets.Measure e-books on the horizontal axis and sports tickets on the vertical axis.Suppose the price of e-books decreases.Holding everything else constant,Phillip's budget line has become _____,and his optimal consumption bundle will be on a _____ indifference curve. Scenario: E-Books and Sports Tickets
Phillip has an income of $300 per month,which he uses to purchase two goods,e-books and sports tickets.Each e-book costs $10,and each ticket costs $15.
A)flatter higher
B)steeper;lower
C)flatter;lower
D)steeper;higher

Question

Quizplus · Accepted Answer

When the price of e-books decreases, the budget line becomes flatter because Phillip can now buy more e-books for the same amount of money. His optimal consumption bundle will be on a higher indifference curve because he can achieve a higher level of satisfaction with his new purchasing power.

(Scenario: E-Books and Sports Tickets)Read the Scenario E-Books and Sports