Imagine a budget line depicting a consumer's possible allocation of a given income between fruit and vegetables.If the consumer's income increases at the same time the price of vegetables rises,the budget line's intercept with the
A)fruit axis will be unaffected
B)fruit axis will move toward the origin
C)vegetable axis will be unaffected
D)fruit axis will move toward the origin.
E)vegetable axis might remain unchanged,move toward the origin,or move away from the origin

Question

Quizplus · Accepted Answer

The intercept with the vegetable axis depends on the relative changes in income and the price of vegetables. If income increases proportionally more than the price of vegetables, the intercept moves away from the origin; if less, it moves toward the origin; if equal, it remains unchanged.

Imagine a Budget Line Depicting a Consumer's Possible Allocation of a Given