Consider a consumer with income M, who can buy good x₁ at price p₁ per unit and can buy good x2 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 x2 measured along the vertical axis. If p₁ increases and p2increases (though not necessarily by the same percentage), while M remains unchanged, which of the following changes to the consumer's budget set definitely occur? O The budget line slope becomes steeper O The budget set becomes strictly larger None of these changes necessarily occur The budget set becomes strictly smaller O The budget line slope becomes flatter

Consider a consumer with income M, who can buy good x₁ at price p₁ per unit and can buy good x2 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 x2 measured along the vertical axis. If p₁ increases and p2increases (though not necessarily by the same percentage), while M remains unchanged, which of the following changes to the consumer's budget set definitely occur? O The budget line slope becomes steeper O The budget set becomes strictly larger None of these changes necessarily occur The budget set becomes strictly smaller O The budget line slope becomes flatter

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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