Limited access

Upgrade to access all content for this subject

The Boxing Ring Boxing Equipment Store has two goods, Good K and Good O. Cassius is an up and coming boxer, and spends his entire month’s income at The Boxing Ring Boxing Equipment Store. Let the following graph be an example of Cassius' budget constraint.

What happens to Cassius’ budget constraint in the following scenarios?

The price of Good K halves.
Select Option The budget constraint rotates clockwise around point K.The budget constraint rotates counter-clockwise around point K.The budget constraint rotates clockwise around point O.The budget constraint rotates counter-clockwise around point O.The budget constraint shifts inwards.The budget constraint shifts outwards.The budget constraint does not change.


The price of Good O halves.
Select Option The budget constraint rotates clockwise around point K.The budget constraint rotates counter-clockwise around point K.The budget constraint rotates clockwise around point O.The budget constraint rotates counter-clockwise around point O.The budget constraint shifts inwards.The budget constraint shifts outwards.The budget constraint does not change.


Cassius’ income doubles, but so do the prices of Good K and Good O.
Select Option The budget constraint rotates clockwise around point K.The budget constraint rotates counter-clockwise around point K.The budget constraint rotates clockwise around point O.The budget constraint rotates counter-clockwise around point O.The budget constraint shifts inwards.The budget constraint shifts outwards.The budget constraint does not change.
Select an assignment template