If, on an indifference map, a normal good Y is represented on the vertical axis and good X is represented on the horizontal axis, as the price of Y falls

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    the absolute value of the slope of the budget line increases, the consumer purchases more Y, and the marginal rate of substitution increases.
     the budget line becomes flatter, the consumer purchases more Y, and the marginal rate of substitution decreases.
     the absolute value of the slope of the budget line increases, the consumer purchases more X, and the marginal rate of substitution increases.
     the absolute value of the slope of the budget line decreases, the consumer purchases more X, and the marginal rate of substitution decreases.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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the absolute value of the slope of the budget line increases, the consumer purchases more Y, and the marginal rate of substitution increases.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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