8) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of cheese increases? The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a higher quantity of cheese. o The BC shifts to the left (down). The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a lower quantity of cheese. O The BC shifts to the right (up).
8) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of cheese increases? The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a higher quantity of cheese. o The BC shifts to the left (down). The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a lower quantity of cheese. O The BC shifts to the right (up).
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.9P
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Transcribed Image Text:8) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and
indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis.
Which of the following statements is true if the price of cheese increases?
The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a higher quantity of cheese.
The BC shifts to the left (down).
The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a lower quantity of cheese.
The BC shifts to the right (up).
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