Sarah spends $100 and buys 5 pizzas at $10 each and 10 subs at $5 each. Then the government taxes subs, and the price rises to $10 each. Simultaneously, the government gives Sarah a grant of $50 in income to make up for this change. Does Sarah's budget line change?
As a result, Sarah's budget line

Question

Sarah spends $100 and buys 5 pizzas at $10 each and 10 subs at $5 each. Then the government taxes subs, and the price rises to $10 each. Simultaneously, the government gives Sarah a grant of $50 in income to make up for this change. Does Sarah's budget line change? 
 As a result, Sarah's budget line

Answer

swivels around the original consumption choice.

Answer

shifts leftward and parallel to the original budget line.

Answer

does not change.

Answer

has fewer affordable combinations of pizzas and subs.

Answer

shifts rightward and parallel to the original budget line.

Crowdly

Sarah spends $100 and buys 5 pizzas at $10 each and 10 subs at $5 each. Then the...

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