Suppose the Only Two Goods That Lorenzo Consumes Are Wine

question 150

Multiple Choice

Suppose the only two goods that Lorenzo 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. If you illustrate wine on the vertical axis and cheese on the horizontal axis, then

• A)the slope of Lorenzo's budget has not changed.
• B)the slope of Lorenzo's budget constraint is flatter at the new prices.
• C)the slope of Lorenzo's budget constraint is steeper at the new prices.
• D)Lorenzo's budget constraint has shifted in a parallel fashion to the budget constraint with the old prices.

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Definitions:

Long-Term Objectives

Strategic goals set to be achieved over an extended period, typically over several years, focusing on sustainable growth and development.

Timely Solutions

Responses or resolutions provided within an appropriate or advantageous time frame, often critical for addressing issues effectively.

Intuitive Feelers

Individuals who tend to make decisions based on their instincts and emotions, often prioritizing interpersonal harmony and the well-being of others.

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Having or showing an accurate and deep understanding; perceptive.