Suppose that the quantity of pizzas consumed per month is on the x-axis and the quantity of tacos consumed per month is on the y-axis, an increase in the price of pizza holding the price of tacos constant will:
A)cause the budget line to shift inward toward the origin in a parallel fashion.
B)cause the y-intercept to remain the same, but the x-intercept will move closer to the origin.
C)cause the budget line to shift outward from the origin in a parallel fashion.
D)cause the x-intercept to shift away from the origin.

Question

Quizplus · Accepted Answer

An increase in the price of pizza, with the price of tacos constant, reduces the quantity of pizzas that can be bought for a given budget. This results in the x-intercept (maximum quantity of pizzas that can be bought) moving closer to the origin, while the y-intercept (maximum quantity of tacos that can be bought) remains unchanged because the price of tacos hasn't changed.

Suppose That the Quantity of Pizzas Consumed Per Month Is