In a usual week, Karl spends $20 to buy bagels and coffee. This week the price of a coffee rises by $0.50 a cup. Which of the following statements is correct?

Question

Answer

The relative price of coffee falls.

Answer

Karl's budget line shifts inward and is parallel to his original budget line.

Answer

The relative price of a bagel rises.

Answer

Karl's budget line shifts outward and is parallel to his original budget line.

Answer

The relative price of coffee rises.

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In a usual week, Karl spends $20 to buy bagels and coffee. This week the price o...

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