The figure above shows three budget lines.
-Based on the figure above,which of the following would lead the consumer's budget line to shift from BL? to BL??
A) a rise in the price of water
B) a fall in the price of water
C) a rise in the price of water and the price of gum
D) a decrease in the consumer's budget
E) an increase in the consumer's budget

Question

The figure above shows three budget lines.
-Based on the figure above,which of the following would lead the consumer's budget line to shift from BL? to BL??
A) a rise in the price of water 
B) a fall in the price of water 
C) a rise in the price of water and the price of gum 
D) a decrease in the consumer's budget 
E) an increase in the consumer's budget

Quizplus · Accepted Answer

An increase in the consumer's budget would shift the budget line outward, allowing the consumer to afford more of both goods.

The Figure Above Shows Three Budget Lines