If the Prices of Both Goods and Income Increase by the Same

question 31

Multiple Choice

If the prices of both goods and income increase by the same percentage,what will happen to the budget line?

• A) The budget line rotates inward from the intercept on the axis of the good that did not change in price.
• B) The budget line rotates outward from the intercept on the axis of the good that did not change in price.
• C) The budget line shifts outward without a change in slope.
• D) Nothing.

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Definitions:

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one's preconceptions, leading to statistical errors.

Probability Distribution

An equation or model that describes the likelihood of various outcomes in a stochastic process.

Random Sample

A subset of individuals chosen from a larger set, where each individual is chosen randomly and entirely by chance, giving each individual an equal probability of being chosen at any stage during the sampling process.

Female Students

Students who identify as female within an educational institution or academic study.