Suppose That the Prices of Good X and Good Y

question 51

Multiple Choice

Suppose that the prices of good x and good y both double and income triples.On a graph where the budget line is drawn with x on the horizontal axis and y on the vertical axis,

• A)the budget line becomes steeper and shifts inward.
• B)the budget line becomes flatter and shifts outward.
• C)the budget line becomes flatter and shifts inward.
• D)the new budget line is parallel to the old budget line and lies below it.
• E)None of the above.