An increase in the price of one good will cause
A)an inward rotation of the budget curve.
B)an outward rotation of the budget curve.
C)a parallel shift in the budget curve.
D)an inside shift of the budget curve.

Question

Quizplus · Accepted Answer

When the price of one good increases, the budget constraint shifts inward, indicating that the consumer can now buy less of all goods given their income. This leads to an inward rotation of the budget curve.

An Increase in the Price of One Good Will Cause