If the prices of food and non-food stay constant and consumers income doubles,what will happen to the budget line?
A) The budget line will stay unchanged.
B) The budget line will shift in toward the origin in a parallel fashion.
C) The budget line will shift out from the origin in a parallel fashion.
D) The budget line will change but we need more information to know how.

Question

Quizplus · Accepted Answer

When consumers' income doubles and the prices of food and non-food stay constant, their purchasing power increases. Therefore, the budget line will shift out from the origin in a parallel fashion, indicating that they can now afford to purchase more of both goods.

If the Prices of Food and Non-Food Stay Constant and Consumers