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.
(Scenario: e-Books and Sports Tickets) Look at 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:
A) flatter, and his optimal consumption bundle will be on a higher indifference curve.
B) steeper, and his optimal consumption bundle will be on a lower indifference curve.
C) flatter, and his optimal consumption bundle will be on a lower indifference curve.
D) steeper, and his optimal consumption bundle will be on a higher indifference curve.
Correct Answer:
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