The Following Diagram Shows Two Budget Lines: a and B

question 20

Multiple Choice

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 decrease in income and a decrease in the price of X
• B) a decrease in income and an increase in the price of X
• C) an increase in income and a decrease in the price of X
• D) an increase in income and an increase in the price of X

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Definitions:

Unilateral Contract

A contract in which only one party makes a promise or undertakes a performance, while the other party must act to trigger the obligation.

Legally Sufficient Consideration

Value that the law recognizes as adequate to support a contract, ensuring that each party agrees to give or do something of value.

Economic Duress

A condition in which one is forced to engage in a financial transaction due to threats or pressures, rendering the agreement involuntary.

Irrevocable Offer

An offer that cannot be withdrawn or canceled by the offeror for a specified period, assuming the offeree has given some consideration in exchange for the offer's irrevocability.