1.)Assume that a consumer purchases only two products. Suppose that the consumer

Question

1.)Assume that a consumer purchases only two products. Suppose that the consumer's money income doubles, and the prices of the two products also double. These changes in income and prices will result in A.) An increase in the slope of the budget line B.) A shift of the budget line inward to the left C.) No change in the budget line D.) A shift of the budget line outward to the right 2.)Another description for ceteris paribus is: A.) Loaded terminology B.) The fallacy of composition C.) Other things equal D.) Post hoc, ergo propter hoc

Explanation / Answer

1. shift of the budget line outward to the right The position of your budget line changes, but the slope remains the same. so shifting towards right will take place .. 2.C.) Other things equal Definition of 'Ceteris Paribus' Latin phrase that translates approximately to "holding other things constant" and is usually rendered in English as "all other things being equal". In economics and finance, the term is used as a shorthand for indicating the effect of one economic variable on another, holding constant all other variables that may affect the second variable

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