Refer to the accompanying figure. Suppose Zeynep's budget constraint is initially given by BC1. If her budget constraint shifts to BC2, this could be the result of:
A)an increase in the price of cheese sandwiches and a decrease in the price of ham sandwiches.
B)a decrease in the price of cheese sandwiches and an increase in income.
C)a decrease in the price of cheese sandwiches and an increase in the price of ham sandwiches.
D)an increase in the price of cheese sandwiches and a decrease in income.

Question

Refer to the accompanying figure.  Suppose Zeynep's budget constraint is initially given by BC1. If her budget constraint shifts to BC2, this could be the result of:
A)an increase in the price of cheese sandwiches and a decrease in the price of ham sandwiches. 
B)a decrease in the price of cheese sandwiches and an increase in income. 
C)a decrease in the price of cheese sandwiches and an increase in the price of ham sandwiches. 
D)an increase in the price of cheese sandwiches and a decrease in income.

Quizplus · Accepted Answer

Zeynep's maximum number of ham sandwiches and cheese sandwiches have both increased, but her ability to buy cheese sandwiches has increased by a greater amount. The only available answer that can explain this is that her income has increased and the price of cheese sandwiches has decreased.

Refer to the Accompanying Figure