-In the figure above, an increase in income would result in the budget line
A) making a parallel shift toward point a.
B) becoming steeper.
C) becoming flatter.
D) making a parallel shift toward point c.

Question

-In the figure above, an increase in income would result in the budget line
A) making a parallel shift toward point a. 
B) becoming steeper. 
C) becoming flatter. 
D) making a parallel shift toward point c.

Quizplus · Accepted Answer

An increase in income shifts the budget line outward in a parallel manner, allowing the consumer to afford more of both goods. This shift moves the budget line toward point c, indicating an increase in the consumer's purchasing power for both goods without changing the relative prices of the goods.

-In the Figure Above, an Increase in Income Would Result