As the price of good X increases,the budget line
A) makes a parallel shift outward.
B) makes a parallel shift inward.
C) pivots inward.
D) pivots outward.

Question

Quizplus · Accepted Answer

When the price of good X increases, the budget line pivots inward because the consumer can now afford less of good X for any given amount of good Y, assuming income and the price of good Y remain constant. This change alters the slope of the budget line without shifting its position on the Y-axis.

As the Price of Good X Increases,the Budget Line