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A consumer consumes good x and good y. She initially has an income of I=$1,000, and faces prices of px=$10 and py=$20. Then, the price of good x doubles. In response to the rising prices, the government gives the consumer a lump-sum payment of $300. Which of the following statements is true?
A. The slope of the original budget line is -2 and the slope of the new line is -1.
B. The maximum amount of good y that the consumer can buy with the new prices and lump-sum payment is 60 units.
C. The original maximum amount of good x that the consumer could buy before the price change and additional income is 50 units.
D. The maximum amount of good x that the consumer can buy with the new prices and lump-sum payment is 65 units.
E. None of the above.
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