Lisa eats both pizzas and burritos.If the price of a pizza increases,Lisa's opportunity set
A) becomes larger.
B) becomes smaller.
C) is unchanged.
D) cannot be determined without more information.

Question

Quizplus · Accepted Answer

If the price of pizza increases, Lisa's budget for food will be reduced, meaning that her opportunity set will become smaller. She may have to choose between buying a pizza or a burrito, or reduce the number of pizzas or burritos she can buy with her budget. Therefore, the correct answer is B) becomes smaller.

Lisa Eats Both Pizzas and Burritos