-Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line
A) shifts rightward and its slope does not change.
B) shifts leftward and its slope does not change.
C) becomes flatter.
D) becomes steeper.

Question

-Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line
A) shifts rightward and its slope does not change. 
B) shifts leftward and its slope does not change. 
C) becomes flatter. 
D) becomes steeper.

Quizplus · Accepted Answer

When the price of a magazine falls, Lizzie can buy more magazines for the same amount of money, making the budget line flatter as the opportunity cost of magazines decreases relative to other goods.

-Lizzie's Budget Line Is Shown in the Figure Above