Question

When the price of good Y decreases, holding the price of X and income fixed, what happens to the slope of the budget constraint?  

Answer 1

We can clearly see from the graph and explanation below that the budget line will rotate or pivot outwards on the Y- axis as the price of good Y decreases ( other things constant ) . This means with same income and price of X , more of Y can be consumed as price decreases .

Now slope = - Px / Py

So , when Py falls , the value of slope rises as denominator falls . So the slope increases to ( - Px / Py' ) . It becomes steeper .