Income stays at ₹100 and P₂ stays at ₹10, but P₁ rises from ₹5 to ₹10. The good-1 intercept of the budget line moves from

20 to 10, and the line becomes steeperCorrect answerYour answer10 to 20, and the line becomes flatterCorrect answerYour answer20 to 10, and the line becomes flatterCorrect answerYour answerit does not moveCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

M ÷ P₁: 100 ÷ 5 = 20 before, 100 ÷ 10 = 10 after.
Slope P₁ ÷ P₂ rises from 0.5 to 1: the line pivots inward on the good-2 axis and gets steeper.

Concept: Rise in P₁
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsWhen income or prices change

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Income stays at ₹100 and P₂ stays at ₹10, but P₁ rises from ₹5 to ₹10. The good-1 intercept of the budget line moves from

Explanation