Textbooks measured along the horizontal axis

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Reference no: EM131253085

Smith is given a voucher that can be spent only on textbooks. Smith has a budget constraint with textbooks measured along the horizontal axis and everything else on the vertical axis. Suppose everything else is comprised only of normal goods. Then:

A. the voucher causes Smith to increase his spending on textbooks by more than the amount of the voucher.

B. Smith will most likely end up spending some more money on everything else after receiving the voucher.

C. Smith will not buy any textbooks because he can use the voucher for all other goods.

D. the voucher does not have any impact on Smith’s consumption

Reference no: EM131253085

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