In Year 1, the Price of Good X Was $4

question 31

Multiple Choice

In year 1, the price of good x was $4, the price of good y was $1, and income was $70.In year 2, the price of x was $9, the price of good y was $2, and income was $70.On a graph with x on the horizontal axis and y on the vertical, the new budget line is

• A)steeper than the old one and lies below it.
• B)steeper than the old one and lies above it.
• C)flatter than the old one and lies below it.
• D)flatter than the old one and lies above it.
• E)None of the above.

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Definitions:

Account

A record or statement of financial expenditure and receipts relating to a specific period or purpose; also used to refer to a customer's relationship with a financial institution.

Simple Interest

Interest computed solely on the initial amount invested, excluding any previously earned interest.

Investment

The undertaking of investing resources, usually capital, with the foresight of amassing income or profits.

Months

Units of time, typically used to measure periods within a year, consisting of 28 to 31 days.