Question

When income decreases, the budget line: shifts inward. shifts outward. rotates outward. rotates inward.

When income decreases, the budget line:
shifts inward.
shifts outward.
rotates outward.
rotates inward.

Homework Answers

Answer #1

Option A.

  • When the income decreases, the budget line shifts inward.
  • The budget line or a budget constraint illustrates the amount of goods and services a consumer can purchase with his current income.
  • The budget constraint and income are said to have direct relationship between themselves. When income decreases, the budget line shifts inwards as a person can only purchase fewer goods and services with his income, which shows that the budget constraint has also decreased with income.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A budget line for Goods X and Y expands or moves outward when Income increases; if...
A budget line for Goods X and Y expands or moves outward when Income increases; if the price of X falls relative to Y, what happens?
1- If a consumer's income decreases, what will happen to the budget line? Multiple Choice It...
1- If a consumer's income decreases, what will happen to the budget line? Multiple Choice It will shift outward. It will become steeper. It will become flatter. It will shift inward. 2- If an increase in income causes a decrease in the consumption of good Y, we know that good Y is: Multiple Choice a normal good. a substitute. a complement. an inferior good. 3- A > B means: Multiple Choice bundle A is not preferred to bundle B. bundle...
When the federal government's budget deficit decreases, the aggregate___________ curve for bonds shifts to the____________. supply;...
When the federal government's budget deficit decreases, the aggregate___________ curve for bonds shifts to the____________. supply; right. supply; left. demand; left. demand; right. Can't Tell from the information provided
The increase of budget deficit, decreases the supply of loanable funds and the supply curve shifts...
The increase of budget deficit, decreases the supply of loanable funds and the supply curve shifts left. Discuss the possible effects of this crowding out effect in an open economy.
1. As a household consumes more and more of an identical good,             a) total utility...
1. As a household consumes more and more of an identical good,             a) total utility increases at an increasing rate.             b) total utility eventually decreases.             c) marginal utility always increases.             d) marginal utility always decreases.             e) both b) and d) are correct 2. Which of the following is not an assumption of consumer theory?             a) some income is saved after consumption             b) diminishing marginal utility             c) nonsatiation             d) all of the...
1)An increase in one product price but not the other: a. shifts the budget line parallel...
1)An increase in one product price but not the other: a. shifts the budget line parallel to the left b. shifts the budget line parallel to the right c. changes the slope of the budget line d. doesn’t affect the budget line because income remains constant 2)Assume you allocate your time between attending classes (which take 2 hours) and working out (which take 1 hour). To maximize your total utility, you will choose a bundle where: a. the marginal utility...
A consumer has 100 dollars to spend on two goods, price of a sweater is $...
A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10 and price of shoes is $ 20. Assume the consumer’s budget line has shoes on the vertical axis and sweaters on the horizontal axis; Determine the slope of the budget line _____ (give your answer in decimals) What is the vertical intercept of the budget line?________ What will be the effect of an increase of income on the budget line______ (use one of...
Suppose the prices of goods X and Y both double, while the consumer's income is unchanged....
Suppose the prices of goods X and Y both double, while the consumer's income is unchanged. This will cause the consumer's budget constraint to: Select one: a. shift inward in a parallel fashion b. shift inward and become flatter c. shift inward and become steeper d. shift outward in a parallel fashion
When the price of good Y decreases, holding the price of X and income fixed, what...
When the price of good Y decreases, holding the price of X and income fixed, what happens to the slope of the budget constraint?  
A graph that shows all of the combinations of capital and labor that can be used...
A graph that shows all of the combinations of capital and labor that can be used to produce a given level output is which of the following? a. A budget line b. An indifference curve c. An isoquant d. An isocost line The least-cost method of production is shown at the point of tangency between ________ and the ________ isoquant on an isoquant diagram. a. indifference curve; highest b. budget line; highest c. budget line; lowest d. marginal cost curve;...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT