Suppose that the quantity of hamburgers is measured along the vertical axis and that the quantity of popcorn is measured along the horizontal axis. The vertical intercept is 10 hamburgers, and the slope of the budget line is -2. If the price of popcorn falls from $1 to $0.50, then we know that
A) the vertical intercept shifts to 20 hamburgers.
B) the vertical intercept shifts to 5 hamburgers.
C) the horizontal intercept shifts to 10 bags of popcorn.
D) the horizontal intercept shifts to 20 bags of popcorn.

Question

Quizplus · Accepted Answer

The fall in the price of popcorn means that the horizontal intercept will shift to the right, as more popcorn can now be purchased for the same amount of money. The vertical intercept will not change, as it represents the quantity of hamburgers that can be purchased with the given budget, regardless of the price of popcorn.

Suppose That the Quantity of Hamburgers Is Measured Along the Vertical