Refer to Goods X and Y. When the price of good X rises, what happens to the budget line?
Assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. PX denotes the price of good X, PY is the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions.
a. The budget line shifts in, with no change in the slope.
b. The budget line becomes flatter, and the horizontal intercept moves to the right.
c. The budget line becomes steeper, with no change in the vertical intercept.
d. The budget line pivots about the horizontal intercept, with the vertical intercept moving up.
c. The budget line becomes steeper, with no change in the vertical intercept.
You might also like to view...
Use the data in the table below to answer the following question.PriceQuantity Demanded$201218171620142412301036840644448The price elasticity of demand (based on the midpoint formula) when price decreases from $12 to $10 is
A. inelastic. B. unit elastic. C. elastic. D. perfectly elastic.
The law of supply states that the quantity supplied of a good and
a. the price of a key input are inversely related b. its price are inversely related c. the price of a key input are positively related d. its price are positively related e. the price of an alternate good are positively related
A manager of a small firm who believes in the signaling theory of education would encourage her employees to obtain additional education to raise their on-the-job productivity
a. True b. False Indicate whether the statement is true or false
Federal Reserve notes are
A) paper currency.
B) checks issued by the U.S. government.
C) savings bonds.
D) travelers' checks.