Suppose all prices double and income triples. The budget line:
A)will become steeper.
B)will become flatter.
C)will shift in toward the origin.
D)will shift out from the origin.

Question

Quizplus · Accepted Answer

When all prices double and income triples, the budget line shifts out from the origin because the consumer can now afford more of both goods, indicating an increase in purchasing power relative to the original prices.

Suppose All Prices Double and Income Triples