For a person who consumes only steak and lobster, a fall in either the price of a steak or the price of a lobster shifts the budget line for the two leftward and does not change its slope.

Question

Quizplus · Accepted Answer

A fall in the price of either steak or lobster would lead to an increase in the purchasing power of the person's budget, which would result in a shift of the budget line outward (to the right), not inward (to the left). This would change the slope of the budget line, as the new intercepts on the axes would be different.

For a Person Who Consumes Only Steak and Lobster, a Fall