Finding true statement about indifference curves and movement from price changes, economics homework help
FYI – All the point are supposed to lie on the indifference curves for these questions even if they appear a touch off.
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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 fashion | |
| D. | 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!
