If the price of good X increases,what will happen to the budget line?
A) It will have a parallel shift inward.
B) It will have a parallel shift outward.
C) It will become steeper.
D) It will become flatter.

Question

Quizplus · Accepted Answer

When the price of good X increases, the budget line becomes steeper because the consumer can now afford less of good X relative to good Y, assuming the price of good Y remains constant. This change reflects a decrease in the relative affordability of good X.

If the Price of Good X Increases,what Will Happen to the Budget