Final answer:
After choosing between two options in the free choice paradigm, people tend to like the painting they chose more and the one they didn't choose less, which is an example of cognitive dissonance. This is demonstrated by changes in preferences similar to how Manuel and Natasha change their consumption choices with changes in income, illustrating alterations in decision-making and preference.
Step-by-step explanation:
In the free choice paradigm you're referring to, typically what happens is that people's liking for the painting they chose increases, and their liking for the painting they did not choose decreases. This phenomenon is related to cognitive dissonance, where after making a choice, individuals tend to value their selected option more highly and the unselected option less, to reduce the dissonance between the choice made and the foregone option.
Using the provided examples and information on indifference curves as an analogy, we can see that choices and preferences can shift after a decision has been made or when conditions change. In the case of Manuel and Natasha, their choices differed despite having the same budget constraints due to their personal preferences. This concept is also illustrated in their subsequent choices after an increase in income. Such behavior reflects a similar mechanism in decision-making and preference alteration as seen in the free choice paradigm of selecting and re-ranking paintings.