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Posted: March 11th, 2020
Finding true statement about indifference curves and movement from price changes, economics homework help
Question description
FYI - All the point are supposed to lie on the indifference curves for these questions even if they appear a touch off.Based on the budget constraint and 3 indifference curves shown here we know that:A.If the price of pizzas were to fall while the price of apples remained constant then the budget constraint would flatten out (rotate out along the pizza axis)B.If the price of pizzas were to fall while the price of apples remained constant then the budget constraint would flatten out (rotate in along the apple axis)C.If the price of pizzas were to fall while the price of apples remained constant then the budget constraint would shift out in a parallel fashionD.If the price of pizzas were to fall while the price of apples remained constant then the budget constraint would get steeper (rotate in along the pizza axis)Please explain!Thanks!
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