Refer to Figure 5.1.In which graph does a shift from BL1 to BL2 represent an increase in the consumer's income?
A) A
B) B
C) C
D) D

Question

Refer to Figure 5.1.In which graph does a shift from BL1 to BL2 represent an increase in the consumer's income? 
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

In graph B, a shift from BL1 to BL2 represents an increase in the consumer's income. This is because BL1 is the budget line for a lower income, while BL2 is the budget line for a higher income. A shift to the right from BL1 to BL2 shows that the consumer can now afford to buy more of both goods, indicating an increase in income.