Question
with the aid of well labelled diagram(s) with before and after transitions whether the statement below is True, False or Cannot be determined, given the
with the aid of well labelled diagram(s) with before and after transitions whether the statement below is True, False or Cannot be determined, given the information provided: Two commodities, P and Q are perfect substitutes with per unit prices of $PP and $PQ respectively. The income of an individual is given by $I. It is also given that initially, $PP = $PQ. Then it can be reasonably claimed that in a specific situation where $I remains unchanged and due to some exogenous factor, $PP < $PQ, then the budget line, which initially was overlapping an indifference curve will pivot, become flatter and resultantly, the optimal bundle will be always be a corner solution at (0,Q*) and no other possibility would exist.
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