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dskmvld dskmvld
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Suppose that the quantity of hamburgers is measured along the vertical axis and that the number of bags of popcorn is measured along the horizontal axis. The budget constraint has a vertical intercept of 10 hamburgers, and the slope of the line is -1. If the price of popcorn doubles, we know that

• the new equilibrium will have a marginal rate of substitution of -2.

• the vertical axis of the budget line shifts to 5 hamburgers.

• the consumer will buy half as many bags of popcorn as before.

• the new equilibrium will have a marginal rate of substitution of -0.5.
Textbook 
Economics Today: The Micro View

Economics Today: The Micro View


Edition: 19th
Author:
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Kutthroat K.Kutthroat K.
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Helped a lot
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