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s.h_math s.h_math
wrote...
Posts: 293
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A year ago
I'm having trouble with this question sir.

Consider the following pair of figures where the dark blue line is the original budget line for a consumer and the light blue line is the new one.
In Figure A, the change shown was caused by
o
A.
a change in the consumer's tastes away from good Y.
a decrease in the consumer's income.
an increase in the price of good Y.
a decrease in the price of good Y.
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Anonymous
wrote...
#1
A year ago
An increase in the price of good Y.

When the price of a good increases then the consumer will purchase less of it with the given budget. As a result, the budget line will shift inward on the axis. In the above figure( figure A), due to increase in the price of good Y , the budget line shifts inward on the Y axis.
s.h_math Author
wrote...
#2
A year ago
This is part B of it:
would it be a decrease in the​ consumer's income?
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