Suppose that good X is on the horizontal axis and all other goods (measured in dollars)are on the vertical axis in the consumer-choice diagram.If the consumer gains $10 in income,then
A) the new budget line is parallel to and lies 10 units to the left of the old budget line.
B) the budget line shifts up by 10 dollars,with no change in the slope.
C) the vertical intercept of the budget line shifts up by $10,but the horizontal intercept remains unchanged.
D) the slope of the budget line increases by 10 percent.

Question

Quizplus · Accepted Answer

When the consumer gains $10 in income, it means that their budget has increased. Therefore, their budget line will shift upward by $10, but the slope of the line will remain the same because the relative prices of goods have not changed.

Suppose That Good X Is on the Horizontal Axis and All