Suppose that price of good X falls by 50 % while price of Y falls by 25% and Income falls by 50%. Then which of the following is correct? Budget line becomes steeper and consumer is not able to afford some bundles that were affordable before. Budget line becomes flatter and consumer is not able to afford some bundles that were affordable before. Budget line becomes steeper and consumer is able to afford new bundles that were not affordable before. Budget line becomes flatter and consumer is able to afford new bundles that were not affordable before.

Suppose that price of good X falls by 50 % while price of Y falls by 25% and Income falls by 50%. Then which of the following is correct? Budget line becomes steeper and consumer is not able to afford some bundles that were affordable before. Budget line becomes flatter and consumer is not able to afford some bundles that were affordable before. Budget line becomes steeper and consumer is able to afford new bundles that were not affordable before. Budget line becomes flatter and consumer is able to afford new bundles that were not affordable before.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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