Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
-Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint could be
A) AD.
B) BD.
C) CD.
D) not shown on this graph.

Question

Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.  Figure 6.5
-Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint could be
A) AD. 
B) BD. 
C) CD. 
D) not shown on this graph.

Quizplus · Accepted Answer

A decrease in income while prices remain unchanged would shift the budget constraint inward and to the left. CD is the only option that satisfies these conditions.

Refer to the Information Provided in Figure 6