Aaron buys peanut butter and jelly. A decrease in the price of both goods has a similar effect to a(n) _____ in income, making the budget line _____.
A) increase; shift outward
B) increase; pivot outward
C) decrease; shift inward
D) decrease; rotate inward

Question

Quizplus · Accepted Answer

A decrease in the price of both goods effectively increases the purchasing power of a consumer, similar to an increase in income, which shifts the budget line outward, allowing the consumer to buy more of both goods.

Aaron Buys Peanut Butter and Jelly