Edith is buying products X and Y with her money income. Suppose her budget line shifts rightward (outward). This might be the result of
A)the prices of X and Y increasing while her money income remains constant.
B)her money income decreasing while the prices of X and Y remain constant.
C)her money income increasing more than increases in the prices of X and Y.
D)none of these.

Question

Quizplus · Accepted Answer

A rightward (outward) shift of the budget line indicates that Edith can now afford more of products X and Y than before, which could happen if her money income increases more than any increases in the prices of X and Y, allowing her to buy more even if prices have gone up.

Edith Is Buying Products X and Y with Her Money