Suppose a Consumer Can Purchase Only Two Goods,pasta and Cheese

question 35

Multiple Choice

Suppose a consumer can purchase only two goods,pasta and cheese.Let the quantity of pasta be measured on the vertical axis and the quantity of cheese be measured on the horizontal axis.If the price of pasta falls,with no change in the price of cheese or in the consumer's money income,then the budget line for the consumer will rotate

• A)toward the origin and become flatter.
• B)toward the origin and become steeper.
• C)away from the origin and become flatter.
• D)away from the origin and become steeper.
• E)outward parallel to the existing budget line.

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Definitions:

Government Spending

Expenditure by the government in any given period, typically on public services, defense, infrastructure, and social welfare programs.

Regulation

Rules or directives made and maintained by an authority to regulate behavior, usually in the context of business, financial markets, or a profession.

Expansionary Monetary Policy

A central bank policy aimed at increasing the money supply to stimulate economic growth by lowering interest rates and increasing liquidity.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, indicating improvement in living standards.