If a consumer's budget increases,the budget line
A) rotates outward and its slope changes.
B) rotates inward and its slope changes.
C) shifts outward and its slope does not change.
D) shifts inward and its slope does not change.
E) does not change.

Question

Quizplus · Accepted Answer

When a consumer's budget increases, the budget line shifts outward since the consumer can now afford more of both goods. However, the slope of the budget line remains the same because the relative prices of the two goods have not changed.

If a Consumer's Budget Increases,the Budget Line