Samantha has a budget of $40 and buys beef jerky and fried pork rinds.Her budget does not change and the price of both beef jerky and fried pork rinds increases.As a result,
A) Samantha's consumption possibilities have decreased.
B) Samantha's budget line shifts inward.
C) Samantha can still buy the combination of beef jerky and fried pork rinds she was initially consuming because her budget did not change.
D) Answers A and B are correct.
E) Answers A and C are correct.

Question

Quizplus · Accepted Answer

When the prices of both beef jerky and fried pork rinds increase, Samantha's budget line will shift inward. This means that her consumption possibilities have decreased and she can no longer afford the combination of beef jerky and fried pork rinds she was initially consuming. Therefore, both options A and B are correct. Option C is not correct because Samantha's budget did not change, but her ability to purchase the same combination of beef jerky and fried pork rinds has changed due to the increase in prices.

Samantha Has a Budget of $40 and Buys Beef Jerky