Suppose the Price of a Pizza Is €8, the Price

question 36

Multiple Choice

Suppose the price of a pizza is €8, the price of a milk shake is €2, and the consumer's weekly income is €32. Suppose we have constructed the consumer's budget line with pizzas on the vertical axis and milk shakes on the horizontal axis. Given this information, if the consumer's income rises to €48, then what will happen to the consumer's budget line?

• A) It move outwards so that it now intersects the vertical axis at 6 pizzas per week and the horizontal axis at 24 milk shakes per week.
• B) It would not change.
• C) It would move inwards so that it now intersects the vertical axis at 3 pizzas per week and the horizontal axis at 8 milk shakes per week.
• D) It would rotate in a clockwise direction around the point at which it intersects the horizontal axis.

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Definitions:

Dialog

A conversation between two or more people as a feature of a book, play, or movie, or a structured conversation or negotiation between opposing parties.

Multiple Perspectives

The consideration of different viewpoints or angles on a specific issue, allowing for a more comprehensive understanding.

Validity

The degree to which a test or assessment accurately measures what it is intended to measure.

Interdependence Goals

Objectives that require collaborative efforts among individuals or groups to achieve mutual benefits.