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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

Micro Economics For Today
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 3SQP
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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 2 measured along the vertical axis. If p₁ increases 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 O 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
Transcribed Image Text: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 2 measured along the vertical axis. If p₁ increases 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 O 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
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