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

Question

Quizplus · Accepted Answer

When the price of beer doubles to $2, the consumer can now afford only 25 beers with their $50 income, so the budget constraint intersects the vertical axis at 25 beers.

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