Please refer to the following information to answer the question (in bold) below: • You have $400 allocated for your monthly food budget. • You can either purchase meals at a restaurant (R) or buy groceries (G) to prepare food at home. • The price of restaurant meals is $8/meal (PR = $8). • The price of groceries is $2/pound of food (PG= $2). Suppose that the price of restaurant meals rises to $10/meal (PR = $10). Choose the answer below that best characterizes the accuracy or inaccuracy of the following statements: A. If we assume that restaurant meals are the vertical axis good, the increase in PR flattens the slope of the budget constraint. B. Compared to when PR = $8, the y-intercept of the new budget constraint is larger in value. C. Relative to when PR = $8, the consumer can now buy more groceries for each restaurant meals she or he forgoes purchasing. D. The affordable set when PR = $10 includes more bundles than when PR = $8. Statements A and B are True, C and D are False Statements A and C are True, B and D are False Statement A and D are True, B and C are False Statement B and D are True, A and C are False All of the Statements are True

Please refer to the following information to answer the question (in bold) below: • You have $400 allocated for your monthly food budget. • You can either purchase meals at a restaurant (R) or buy groceries (G) to prepare food at home. • The price of restaurant meals is $8/meal (PR = $8). • The price of groceries is $2/pound of food (PG= $2). Suppose that the price of restaurant meals rises to $10/meal (PR = $10). Choose the answer below that best characterizes the accuracy or inaccuracy of the following statements: A. If we assume that restaurant meals are the vertical axis good, the increase in PR flattens the slope of the budget constraint. B. Compared to when PR = $8, the y-intercept of the new budget constraint is larger in value. C. Relative to when PR = $8, the consumer can now buy more groceries for each restaurant meals she or he forgoes purchasing. D. The affordable set when PR = $10 includes more bundles than when PR = $8. Statements A and B are True, C and D are False Statements A and C are True, B and D are False Statement A and D are True, B and C are False Statement B and D are True, A and C are False All of the Statements are True

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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