Suppose the Only Two Goods That Brett Consumes Are Wine

question 180

Multiple Choice

Suppose the only two goods that Brett consumes are wine and cheese.When wine sells for $10 a bottle and cheese sell for $10 a pound,he buys 6 bottles of wine and 4 pounds of cheese - spending his entire income of $100.One day the price of wine falls to $5 a bottle and the price of cheese increases to $20 a pound,while his income does not change.The bundle of wine and cheese that he purchased at the old prices now costs

• A) the same amount at the new prices.
• B) less than Brett's income at the new prices.
• C) more than Brett's income at the new prices.
• D) We do not have enough information to answer the question.

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