Question

Along budget constraint ab​, the price of good x is​ $25 and the price of good y is​ $18. if the price of y decreases to​ $14, the budget constraint will

Answer 1

When the price of good y decreases from $18 to $14, the budget constraint will shift outward or to the right. This means that the consumer will be able to afford more of both goods x and y.

Step-by-step explanation:

When the price of good y decreases from $18 to $14, the budget constraint will shift outward or to the right. This means that the consumer will be able to afford more of both goods x and y. The new budget constraint will be tangent to a higher indifference curve, indicating an increased level of utility.

Answer 2

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