Imagine a budget line between two goods, A and B. If both prices triple while income doubles,
A) the budget line stays the same
B) the budget line rotates clockwise
C) the budget line rotates counterclockwise
D) the budget line shifts outward
E) the budget line shifts toward the origin

Question

Quizplus · Accepted Answer

When both prices triple and income only doubles, the consumer's purchasing power decreases, causing the budget line to shift inward toward the origin.

Imagine a Budget Line Between Two Goods, a and B