An increase in the price of a good causes
A) a change in the slope of the budget line.
B) an increase in the consumption of that good.
C) a rightward shift of the demand curve for that good.
D) a parallel rightward shift of the budget line.

Question

Quizplus · Accepted Answer

An increase in the price of a good causes a change in the slope of the budget line because the relative price of goods changes, affecting the rate at which one good can be substituted for another.

An Increase in the Price of a Good Causes