Question
Thomas consumes coffee (C) and doughnuts (D). His budget line was described by the equation D = 20 - 2C. At a later time, his
Thomas consumes coffee (C) and doughnuts (D). His budget line was described by the equation D = 20 - 2C. At a later time, his budget line could be described by the equation D = 10 - C. The change between the earlier budget line and the later could be explained by the following.
a. the price of coffee and Thomas's income both increased.
b. the price of coffee increased and Thomas's income decreased.
c. the price of coffee decreased and Thomas's income increased.
d. the price of coffee and Thomas's income both decreased.
e. Thomas's utility for doughnuts decreased.
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