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The Following Diagram Shows Two Budget Lines: a and B

question 96

Multiple Choice

The following diagram shows two budget lines: A and B. The following diagram shows two budget lines: A and B.   Which of the following could explain the change in the budget line from A to B? A)  a simultaneous decrease in the price of X and the price of Y B)  an increase in income C)  a decrease in income and a decrease in the price of Y D)  Both a and b are correct.
Which of the following could explain the change in the budget line from A to B?


Definitions:

Domestic Producers

Companies and individuals within a country that produce goods and services for the local market.

Quotas

Quantitative limits set by governments on the amount of specific goods or services that can be imported or exported during a specified time frame.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Quota Rights

Licenses or permissions issued by a government that allow specific quantities of goods to be imported or exported.

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