-In the above figure, the budget line would rotate in the direction indicated as a result of a
A) fall in the price of a book.
B) rise in the price of a book.
C) rise in the price of a movie.
D) decrease in income.

Question

-In the above figure, the budget line would rotate in the direction indicated as a result of a
A) fall in the price of a book. 
B) rise in the price of a book. 
C) rise in the price of a movie. 
D) decrease in income.

Quizplus · Accepted Answer

A fall in the price of a book would make books relatively cheaper compared to movies, causing the budget line to rotate outward from the axis representing movies, as indicated in the question. This reflects the consumer's increased ability to purchase books with the same budget.

-In the Above Figure, the Budget Line Would Rotate in the Direction