Assertion (A): A fall in income shifts the budget line inward, parallel to the old line.
Reason (R): The slope of the budget line depends only on the two prices.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Both are true.
Because the slope depends only on prices, an income change moves the line without tilting it: R explains why the shift is parallel.

Concept: Parallel shift and the slope
Typical timeTypical: 70 s
Your timeYours: —

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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Assertion (A): A fall in income shifts the budget line inward, parallel to the old line.Reason (R): The slope of the budget line depends only on the two prices.

Explanation

Assertion (A): A fall in income shifts the budget line inward, parallel to the old line.
Reason (R): The slope of the budget line depends only on the two prices.