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Budget Line & Optimal Choice · Question 19 of 67

Question 19

EasyOriginal question

If a consumer's income rises and prices stay the same, the budget line

Options for question 19

Show the answer and explanation
CorrectNot quiteAnswer D

Correct answer: D

Explanation

  1. Both intercepts M ÷ P₁ and M ÷ P₂ rise with M.

  2. The slope −P₁ ÷ P₂ is unchanged, so the new line is parallel and further out.

Concept
Effect of a rise in income
Typical time
40 s
Your time
—
The rule this testsWhen income or prices change
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Ten questions from Budget Line & Optimal Choice, at your own pace.

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Ten questions from Budget Line & Optimal Choice, at your own pace.

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