Multiple Choice
Assume the quantity of good X is measured on the horizontal axis and the quantity of good Y on the vertical axis.Initial prices are PX = $5 and PY = $10.The consumer's income is $100.If PY increases to $20,then
A) the entire budget line shifts parallel to the left.
B) the budget line will rotate to the left with the slope changing from 1/2 to 1/4 (in absolute values) .
C) the budget line will rotate to the left,slope remaining constant.
D) the budget line will rotate to the right with the slope changing from 1/4 to 1/2 (in absolute values) .
E) the entire budget line shifts parallel to the right.
Correct Answer:

Verified
Correct Answer:
Verified
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