-In the above figure, if the price of milk rises, the budget line
A) rotates outward and the slope becomes steeper.
B) shifts inward and its slope does not change.
C) rotates inward and the slope becomes steeper.
D) rotates inward and the slope becomes more shallow.

Question

-In the above figure, if the price of milk rises, the budget line
A) rotates outward and the slope becomes steeper. 
B) shifts inward and its slope does not change. 
C) rotates inward and the slope becomes steeper. 
D) rotates inward and the slope becomes more shallow.

Quizplus · Accepted Answer

When the price of milk rises, the budget line rotates inward because the consumer can afford less milk for the same amount of money, making the slope steeper as the opportunity cost of milk increases relative to other goods.

-In the Above Figure, If the Price of Milk Rises