Use the following to answer questions :
Figure 5A-2
-Refer to Figure 5A-2.Assuming income is held constant, the shift outward to the budget line AC is caused by an increase in the price of Y.

Question

Use the following to answer questions :
Figure 5A-2 
-Refer to Figure 5A-2.Assuming income is held constant, the shift outward to the budget line AC is caused by an increase in the price of Y.

Quizplus · Accepted Answer

The shift outward to the budget line AC, assuming income is held constant, would be caused by a decrease in the price of Y or an increase in the consumer's income, not an increase in the price of Y. An increase in the price of Y would shift the budget line inward.

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