If the quantity of tea is measured on the horizontal axis and the quantity of coffee is measured on the vertical axis,an increase in the price of coffee will cause a budget constraint to ________.
A) pivot leftward along the vertical axis
B) pivot rightward along the vertical axis
C) pivot leftward along the horizontal axis
D) pivot rightward along the horizontal axis

Question

Quizplus · Accepted Answer

An increase in the price of coffee will lead to a decrease in the quantity of coffee that can be purchased for a given budget. Therefore, the budget line will pivot leftward along the vertical axis. The quantity of tea that can be purchased will remain the same, as its price hasn't changed.

If the Quantity of Tea Is Measured on the Horizontal