If a budget line rotates inward and becomes steeper,then the
A) consumer's budget decreased.
B) consumer's budget increased.
C) price of one of the goods decreased.
D) price of one of the goods increased.
E) price of both of the goods must have decreased.

Question

Quizplus · Accepted Answer

When a budget line rotates inward and becomes steeper, it indicates that the price of one of the goods (on the axis where the slope becomes steeper) has increased, making it more expensive relative to the other good. This change alters the rate at which the two goods can be substituted for each other, hence the steeper slope.

If a Budget Line Rotates Inward and Becomes Steeper,then the