Holding all other prices and money income constant, if the price of food rises, then the consumer will adjust her expenditures and

Question

Quizplus · Accepted Answer

If the price of food rises and all other prices and money income remains constant, the budget line will rotate inward from the original budget line. As a result, the consumer's maximum utility will be achieved at a lower point on the new budget line, leading to a lower indifference curve. Therefore, the answer is B.

Holding All Other Prices and Money Income Constant, If the Price