Suppose That Good X Is on the Horizontal Axis and All

question 57

Multiple Choice

Suppose that good X is on the horizontal axis and all other goods (measured in dollars) are on the vertical axis in the consumer-choice diagram.If the consumer gains $10 in income,then

• A) the new budget line is parallel to and lies 10 units to the left of the old budget line.
• B) the budget line shifts up by 10 dollars,with no change in the slope.
• C) the vertical intercept of the budget line shifts up by $10,but the horizontal intercept remains unchanged.
• D) the slope of the budget line increases by 10 percent.

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Definitions:

Postulate Of Economics

Fundamental assumptions that serve as the foundation for economic theories and models, such as rational behavior and market efficiency.

Incentives

Factors, either monetary or non-monetary, that motivate individuals or businesses to act in a certain way.

Scarce

A characteristic of resources that are limited in availability, which can lead to competition for their use.

Freely Available

Resources, information, or products that can be accessed or obtained without any payment or restrictions.