Expert answer:Budget constraint economics question
Answer & Explanation:FYI – All the point are supposed to lie on the indifference curves for these questions even if they appear a touch off.If the consumer is initially on her budget constraint choosing bundle x and then all prices AND income double:A.The consumer would be better off and move to higher utilityB.Whether the utility would now rise or fall depends on the initial prices and income levelC.The consumer would still utility maximize with bundle xD.The consumer would now be worse off and fall to a lower utility levelI thought it could be B, whether the utility would rise or fall depends on the initial price and income level, especially income level but then again if the curves were to remain constant shape and just doubled while considering consumers income level was able to afford point x , A, the consumer would be better off and move to higher utility could also make sense since I believe point Z is maximum utility for the consumer.Please let me know if I am wrong and explain if possible!Thanks!
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