Use the following figure to answer the question : Figure 17-1 : shows the weekly income (in dollars) and leisure (in hours) of a worker using an indifference curve and a budget line.

-_____ will cause the budget line in Figure 17-1 to rotate from NY₂ to NY₃.

Question

Use the following figure to answer the question : Figure 17-1 : shows the weekly income (in dollars) and leisure (in hours) of a worker using an indifference curve and a budget line.

-_____ will cause the budget line in Figure 17-1 to rotate from NY₂ to NY₃.

Quizplus · Accepted Answer

A rise in the wage rate shifts the budget line upward, allowing the worker to afford more leisure time while maintaining the same level of income. This causes the budget line to rotate to the right, from NY₂ to NY₃. Changes in work effort would affect the position on the budget line but not the rotation of the line itself, and changes in the wage rate have a direct effect on the position of the budget line.

Use the Following Figure to Answer the Question : Figure