If there is a change in price of the cereal brand and no change in budget, there will be a movement up its ray.

Question

Quizplus · Accepted Answer

A change in the price of the cereal brand, with no change in budget, would cause a rotation of the budget line around one of its intercepts, not a movement up its ray. The ray represents a constant ratio of the quantities of two goods, not the effect of a price change of one good.

If There Is a Change in Price of the Cereal