An increase in a consumer's budget
A) rotates the budget line outward around the point where it intersects the y-axis.
B) shifts the budget line inward and does not change its slope.
C) rotates the budget line outward around the point where it intersects the x-axis.
D) rotates the budget line inward around the point where it intersects the x-axis.
E) shifts the budget line outward and does not change its slope.

Question

Quizplus · Accepted Answer

An increase in a consumer's budget allows them to afford more of both goods without changing the relative prices of those goods, which is represented by an outward shift of the budget line while maintaining the same slope.

An Increase in a Consumer's Budget