Consumer Optimum Consumption: Budget Constraint and Indifference Curves

18. Consumer Choice and Behavioral Economics / Consumer Optimum Consumption: Budget Constraint and Indifference Curves / Problem 7

Problem 7

If a consumer's income decreases from \$80 to \$60, and the prices of goods E and F are \$8 and \$10 respectively, what is the new optimum consumption point assuming the initial optimum was 5 units of E and 4 units of F?

5 units of E and 2 units of F

3 units of E and 4 units of F

4 units of E and 3 units of F

6 units of E and 1 unit of F