Answer
Emilio's original budget constraint:
Pizza=10
Soda=50
The exchange between the two goods is 5 sodas for every 1 pizza ($50\div10$ = 5)
For Emilio's budget constraint curve to shift parallel outward he will need 2 things to happen:
1) Maintain the ratio that he can consume 5 sodas for every 1 pizza
2) Be able to consume $\gt 50$ sodas and $\gt 10$ pizzas
In option D Emilio is able to consume 20 pizzas ($400\div20$ = 20), and 100 sodas ($400\div4$ = 100).
The answer is D because it satisfies the 2 things that it needed to do:
1) Emilio is still consuming 5 sodas for every 1 pizza ($100\div20$ = 5)
2) Emilio is consuming $\gt$ 50 sodas and $\gt$ 10 pizzas (100$\gt$50, and 20$\gt$10)
Answer: D
Work Step by Step
"The slope at any point on an indifference curve equals the rate at which the
consumer is willing to substitute one good for the other."
Mankiw, N. Gregory (2014-01-01). Principles of Economics (Page 438). South-Western College Pub. Kindle Edition.
Answer: D
