Assume the Quantity of Good X Is Measured on the Horizontal

question 41

Multiple Choice

Assume the quantity of good X is measured on the horizontal axis and the quantity of good Y on the vertical axis.Initial prices are PX = $5 and PY = $10.The consumer's income is $100.If PY increases to $20,then

• A)the entire budget line shifts parallel to the left.
• B)the budget line will rotate to the left with the slope changing from 1/2 to 1/4 (in absolute values).
• C)the budget line will rotate to the left,slope remaining constant.
• D)the budget line will rotate to the right with the slope changing from 1/4 to 1/2 (in absolute values).
• E)the entire budget line shifts parallel to the right.

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