Tony has income m and consumes good x and good y that have initial prices p x and p y . Suppose that p x doubles and p y triples while income remains constant . On a graph showing the budget line with good x on the horizontal axis and good y on the vertical axis,

Question

Tony has income m and consumes good x and good y that have initial prices p x  and p y . Suppose that p x  doubles and p y  triples while income remains constant . On a graph showing the budget line with good x on the horizontal axis and good y on the vertical axis,

Accepted Answer

the new budget line becomes flatter and lies below the old budget line.

Answer

the new budget line becomes steeper and lies below the old budget line.

Answer

the new budget line becomes flatter and lies above the old budget line.

Answer

the new budget line becomes steeper and lies above the old budget line.

Answer

the new budget line crosses the old budget line.

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