Carlos can buy either sushi or eggrolls. If the prices of sushi and eggrolls triple and Carlos's money income doubles, we can deduce that Carlos'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.

Question

Quizplus · Accepted Answer

When the prices of both goods triple, the budget constraint would shift inward. However, since Carlos's income doubles, the inward shift is not as large, but the budget constraint still shifts inward overall, remaining parallel to the old one.

Carlos Can Buy Either Sushi or Eggrolls