Question

If the prices of both the goods X and Y remain unchanged, the increase in the income of the consumer will shift the budget (price) line to ______.

Options

• right

• left

• remain unchanged

• budget line will become steeper

Answer 1

If the prices of both the goods X and Y remain unchanged, the increase in the income of the consumer will shift the budget (price) line to right.

Explanation:

• The budget line shows the combinations of two goods (X and Y) that a consumer can buy with a given income and given prices.
• If income increases but prices remain the same, the consumer can now buy more of both goods.
• This shifts the entire budget line outward (to the right), indicating a higher purchasing power.