An increase in the price of a loaf of bread will
A)cause the budget constraint to rotate outward
B)reduce the minimum number of loaves any individual consumer can purchase
C)increase the minimum number of loaves any individual consumer can purchase
D)increase the maximum number of loaves any individual consumer can purchase
E)reduce the maximum number of loaves any individual consumer can purchase

Question

Quizplus · Accepted Answer

An increase in the price of a good will shift the budget constraint inward, reducing the maximum number of units of that good that can be purchased with the given income. Therefore, an increase in the price of a loaf of bread will reduce the maximum number of loaves any individual consumer can purchase.

An Increase in the Price of a Loaf of Bread