An increase in the price of the good measured on the vertical axis will cause the budget line to
A) Shift outward
B) Become steeper
C) Become flatter
D) Shift inward

Question

Quizplus · Accepted Answer

An increase in the price of a good measured on the vertical axis of a budget constraint diagram makes the budget line become steeper because the consumer can now afford less of that good for any given amount of the other good, effectively reducing the slope of the budget line.

An Increase in the Price of the Good Measured on the Vertical