What would happen if the price of novels increased and novels are measured on the horizontal axis of a budget line diagram?
A)The budget line would shift to the right.
B)The budget line would rotate outward along the horizontal axis.
C)The budget line would rotate inward along the horizontal axis.
D)The budget line would rotate outward along the vertical axis.
E)The budget line would rotate inward along the vertical axis.

Question

Quizplus · Accepted Answer

If the price of novels increases, the budget line would rotate inward along the horizontal axis, since less of other goods can be purchased at the same income level. This is because the consumer needs to allocate more of their income towards the more expensive novels, leaving less money available for other goods.

What Would Happen If the Price of Novels Increased and Novels