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

Question

Quizplus · Accepted Answer

When the price of pasta falls, the consumer can now purchase more pasta for the same amount of money. Therefore, the budget line rotates outward, allowing the consumer to purchase more of both goods. However, since the price of cheese has not changed, the budget line will still touch the horizontal axis at the same quantity of cheese. This means that the budget line will become steeper as the consumer can now purchase more pasta for each unit of cheese they give up. Thus, the correct answer is C- away from the origin and become steeper.

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