Quiz: Bonus Pre-Test #3 Submit Quiz This Question: 1 pt 16 of 17 This Quiz: 20 p
ID: 1117012 • Letter: Q
Question
Quiz: Bonus Pre-Test #3 Submit Quiz This Question: 1 pt 16 of 17 This Quiz: 20 pts possible Chicken The change from BC1 to BC2 represents an increase in the the price of chicken causing an increase in the slope of the budget constraint. The change from BC1 to BC3 represents an increase in the income no changein the slope of the budget constraint. causing BC C1 The change from BC2 to BC3 represents an increase in the the price of salad causing a decrease in the slope of the budget constraint. 10 15 20 25 30 35 Salad Click to select your answer(s)Explanation / Answer
The change from BC1 to BC2 shows the decrease in the price of the chickens and it shows the increase in the slope of the budget constraint.
This is because with the decrease in the price of chickens it is cheaper to buy more chicken, therefore consumer can purchase more of chickens.
The slope increase because the BC curve now becomes less flat.
The change from BC1 to BC3 shows the increase in the income and it shows that there is no change in the slope of budget constraint because budget constraint has shifted rightward parallelly.
The change from BC2 to BC3 shows the decrease in the price of the salad and it shows the decrease in the slope of the budget constraint.
This is because with the decrease in the price of salad it is cheaper to buy more salad, therefore consumer can purchase more of salad. The slope decrease because the BC curve now becomes flatter.
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