Diane consumes gourmet caviar and gold-plated toilet seats, and current prices are Pc $80 and Ps $120, respectively. This week has been good and bad. The good is that her budget for the two goods rises by 15%. The bad news is that the price of caviar rises to $92 and toilet seats rise in price to $138. What happens to her budget constraint? 

Answer rating: 100% (QA)

Dianes budget constraint shifts outward due to the 15 increase in her budget How... View the full answer