Scenario 21-1
Suppose the price of pizza is $10, the price of cola is $1, and the consumer's income is $50. In addition, suppose the consumer's budget constraint measures pizza on the horizontal axis and cola on the vertical axis.
-Refer to Scenario 21-1.If the price of cola doubles to $2,then the
A)budget constraint intersects the vertical axis at 25 colas.
B)slope of the budget constraint rises to -2.
C)budget constraint intersects the vertical axis at 100 colas.
D)budget constraint shifts inward in a parallel fashion.

Question

Quizplus · Accepted Answer

When the price of cola doubles to $2, the consumer can now afford only 25 colas with their $50 income, as opposed to 50 colas when the price was $1.

Scenario 21-1 Suppose the Price of Pizza Is $10, the Price of Price