-The figure above shows Sam's budget line. Which of the following would result in Sam's budget line rotating inward and not changing its vertical intercept?
A) a decline in his preference for coffee
B) a fall in the price of a gallon of gasoline
C) a decrease in Sam's income
D) an increase in the price of a pound of coffee

Question

-The figure above shows Sam's budget line. Which of the following would result in Sam's budget line rotating inward and not changing its vertical intercept?
A) a decline in his preference for coffee 
B) a fall in the price of a gallon of gasoline 
C) a decrease in Sam's income 
D) an increase in the price of a pound of coffee

Quizplus · Accepted Answer

An increase in the price of a pound of coffee would cause the budget line to rotate inward around the vertical intercept, as Sam can now afford less coffee for the same amount of money, while the amount of the other good he can buy remains unchanged.

-The Figure Above Shows Sam's Budget Line