Consider a consumer with income M, who can buy good x₁ at price p₁ per unit and can buy good 2 at price p2 per unit. Consider a budget constraint diagram for this consumer, with quantity of good ₁ measured along the horizontal axis and quantity of good 2 measured along the vertical axis. If p₁increases and M increases (though not necessarily by the same percentage), while p2 remains unchanged, which of the following changes to the consumer's budget set definitely occur? O The budget line slope becomes steeper The budget set becomes strictly larger The budget line slope becomes flatter None of these changes necessarily occur O The budget set becomes strictly smaller

Consider a consumer with income M, who can buy good x₁ at price p₁ per unit and can buy good 2 at price p2 per unit. Consider a budget constraint diagram for this consumer, with quantity of good ₁ measured along the horizontal axis and quantity of good 2 measured along the vertical axis. If p₁increases and M increases (though not necessarily by the same percentage), while p2 remains unchanged, which of the following changes to the consumer's budget set definitely occur? O The budget line slope becomes steeper The budget set becomes strictly larger The budget line slope becomes flatter None of these changes necessarily occur O The budget set becomes strictly smaller

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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