If the budget line rotates, then we know that
A) income has changed.
B) their has been a change in the consumer's tastes.
C) the price of one of the goods had changed.
D) the consumer was not maximizing their utility.

Question

Quizplus · Accepted Answer

A rotation of the budget line occurs due to a change in the relative price of the goods. This means that the price of one of the goods has changed, while the prices of the other goods and the consumer's income remain constant. Therefore, option C is the correct choice. None of the other options are necessarily true given a rotation of the budget line.

If the Budget Line Rotates, Then We Know That