-The above figure gives your budget line between CDs and magazines. If the price of a magazine increased, 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 increased, 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 increases, you can afford fewer magazines for the same amount of money, causing the budget line to rotate inward, reducing the vertical intercept (magazines axis) while the horizontal intercept (CDs axis) remains unchanged.

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