The Figure Above Shows Three Budget Lines

question 263

Multiple Choice

The figure above shows three budget lines.
-Based on the figure above,which of the following would lead the consumer's budget line to shift from BL₀ to BL₁?

• A) A rise in the price of water.
• B) A fall in the price of water.
• C) A rise in the price of water and the price of gum.
• D) A decrease in the consumer's budget.
• E) An increase in the consumer's budget.

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Definitions:

Small Changes

Minor modifications or adjustments made to processes, products, or behaviors, often with the intention of improving efficiency, quality, or outcomes.

Company Profit

The financial surplus generated by a company after all operating expenses, including production costs, taxes, and overheads, have been deducted from total revenue.

Fare

A price paid for transportation.

Trade-ins

A sales transaction where a customer exchanges an old item as partial payment for a new one, common in the automotive and electronics industries.