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Figure: Budget Lines for Oranges and Apples
-(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if the price of an orange rises to $1.00 and the price of an apple rises to $0.50?
A) A
B) B
C) C
D) D

Question

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples 
-(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if the price of an orange rises to $1.00 and the price of an apple rises to $0.50?
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

When the prices of both goods double, the budget line shifts inward, maintaining the same slope since the price ratio remains constant.

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