Hector has a budget for bottled water and soda pop. If the price of soda pop decreases, Hector will achieve the same level of satisfaction because his budget has not changed.

Question

Quizplus · Accepted Answer

A decrease in the price of soda pop allows Hector to buy more soda pop for the same amount of money, potentially increasing his level of satisfaction due to the ability to consume more or allocate savings to other goods.

Hector Has a Budget for Bottled Water and Soda Pop