-The above figure gives your budget line between CDs and magazines. If the price of a magazine falls, then the budget line
A) shifts outward and the slope does not change.
B) rotates inward with no change in the horizontal intercept.
C) rotates inward with no change in the vertical intercept.
D) rotates outward with no change in the vertical axis.

Question

-The above figure gives your budget line between CDs and magazines. If the price of a magazine falls, then the budget line
A) shifts outward and the slope does not change. 
B) rotates inward with no change in the horizontal intercept. 
C) rotates inward with no change in the vertical intercept. 
D) rotates outward with no change in the vertical axis.

Quizplus · Accepted Answer

When the price of a magazine falls, you can buy more magazines for the same amount of money, so the budget line rotates outward, pivoting from the CDs intercept on the vertical axis.

-The Above Figure Gives Your Budget Line Between CDs and Magazines