-In the above figure, if the budget line is originally line DE and the price of coffee decreases, the consumer will
A) drink less coffee and increase bagel consumption slightly.
B) drink more coffee and increase bagel consumption slightly.
C) drink more coffee and decrease bagel consumption slightly.
D) leave consumption of both coffee and bagels unchanged.

Question

-In the above figure, if the budget line is originally line DE and the price of coffee decreases, the consumer will
A) drink less coffee and increase bagel consumption slightly. 
B) drink more coffee and increase bagel consumption slightly. 
C) drink more coffee and decrease bagel consumption slightly. 
D) leave consumption of both coffee and bagels unchanged.

Quizplus · Accepted Answer

When the price of coffee decreases, the budget line pivots outward, allowing the consumer to afford more coffee for the same amount of money. This typically results in an increase in coffee consumption due to its lower price, and it may also allow for a slight increase in bagel consumption because the consumer's overall purchasing power has increased.

-In the Above Figure, If the Budget Line Is Originally