Essay
Billy has a $20 budget to spend on yogurt and cereal.Yogurt cost $2 each and cereal costs $4 each.Suppose that the quantity of yogurt is on the vertical axis and the quantity of cereal is on the horizontal axis.If the price of yogurt increases,which of the following is true?
i.The budget line rotates outward.
ii.Yogurt's marginal utility per dollar decreases.
iii.The relative price of yogurt increases.
A) i and ii
B) i and iii
C) ii and iii
D) i, ii, and iii
E) Only i
Correct Answer:
Verified
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