A candy bar sells for 50 cents, video games are 25 cents each, the horizontal (candy)intercept of Ann's budget line is 12, and the vertical (video game)intercept of Ann's budget line is 24.Which of the following best describes what would happen to the budget line if Ann's income increased?
A)It would shift rightward to a parallel position.
B)It would shift rightward to a nonparallel position.
C)It would shift leftward to a parallel position.
D)It would shift leftward to a nonparallel position.
E)Nothing.

Question

Quizplus · Accepted Answer

An increase in income would shift the budget line to the right, allowing for more candy bars and/or video games to be purchased. The slope (opportunity cost) of the budget line remains constant, so it will remain parallel to the original line.

A Candy Bar Sells for 50 Cents, Video Games Are