the number of bats Sergei could afford to buy. Thus a price increase for baseball bats, the good on the

horizontal axis, causes the budget constraint to rotate inward, as if on a hinge, from the vertical axis. As in the

previous section, the point labeled M represents the originally preferred point on the original budget

constraint, which Sergei has chosen after contemplating his total utility and marginal utility and the tradeoffs

involved along the budget constraint. In this example, the units along the horizontal and vertical axes are not

numbered, so the discussion must focus on whether Sergei will consume more or less of certain goods, not on

numerical amounts.

FIGURE 6.4 How a Change in Price Affects Consumption Choices The original utility-maximizing choice is M. When

the price rises, the budget constraint rotates clockwise. The dashed lines make it possible to see at a glance
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