If Both Prices Increases by 50

question 121

Multiple Choice

If both prices increases by 50%,

• A) budget constraint will be unchanged.
• B) slope of the budget constraint stay the same.
• C) slope of the budget constraint will decrease.
• D) budget constraint will shift outward in a parallel fashion.

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Definitions:

Nonprice Rationing

Distribution or allocation of goods and services based on criteria other than price, often used when there is a shortage.

Excess Demand

A situation in which the quantity demanded of a good or service exceeds the quantity supplied at a given price.

Queuing

The process of forming or waiting in a line, often applied to the theory studying the behavior of lines to improve service efficiency.

Rationing Mechanism

A system or method used to distribute scarce goods or services among competing users.