When the Price of a Good a Consumer Buys Rises,the

question 89

Multiple Choice

When the price of a good a consumer buys rises,the consumer's budget line

• A) shifts inward and its slope does not change.
• B) shifts outward and its slope does not change.
• C) rotates inward and its slope changes.
• D) rotates outward and its slope changes.
• E) does not change.

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Definitions:

Normative Statement

An opinion or judgment that reflects what one believes ought to be, as opposed to what actually is; it cannot be proven true or false.

Positive Statement

An objective statement based on factual information and evidence, which can be tested and verified as true or false.

Production Possibilities Frontier

A graph that illustrates the highest possible production levels of two products, based on available resources and technological capabilities.

Scarcity

A basic economic challenge where human desires appear endless but the resources available are finite.