If the budget line rotates inward and becomes steeper,there is a
A) higher opportunity cost of the good measured on the x-axis.
B) lower opportunity cost of the good measured on the x-axis.
C) larger budget.
D) higher price for the good measured on the y-axis.
E) lower price for the good measured on the x-axis.

Question

Quizplus · Accepted Answer

When the budget line rotates inward and becomes steeper, it means that the prices of both goods have changed, but the consumer's income has remained the same. Therefore, the opportunity cost of the good measured on the x-axis has increased. This is because, with the steeper budget line, it is now more expensive to purchase one unit of the good measured on the x-axis, which means that the consumer must give up more of the other good (measured on the y-axis) to be able to afford it.

If the Budget Line Rotates Inward and Becomes Steeper,there Is