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Figure: Budget Lines for Tea and Scones
-(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if her income decreases to $10?
A) a
B) b
C) c
D) d

Question

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones 
-(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if her income decreases to $10?
A) a 
B) b 
C) c 
D) d

Quizplus · Accepted Answer

If Agnes's income decreases from $20 to $10, her budget line will shift inward, parallel to the original line, because she can now afford fewer of both goods (tea and scones) at the same prices.

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