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CBSECommerce (English Medium) Class 11
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Syllabus

An increase in income will lead to the following change in Budget Line:

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Question

An increase in income will lead to the following change in Budget Line:

Options

  • The diagram shows an outward rotation of the budget line from BA to BA₁, indicating a fall in the price of Good X while income and the price of Good Y remain unchanged.

  • The diagram shows a parallel leftward shift of the budget line from AB to A₁B₁, indicating a decrease in consumer income while prices remain unchanged.

  • The diagram shows an inward rotation of the budget line from BA to BA₁, indicating a rise in the price of Good X while income and the price of Good Y remain unchanged.

  • The diagram shows a parallel rightward shift of the budget line from AB to A₁B₁, indicating an increase in consumer income while prices remain unchanged.

MCQ
Graph
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Solution

The diagram shows a parallel rightward shift of the budget line from AB to A₁B₁, indicating an increase in consumer income while prices remain unchanged.

Explanation:

When income increases and prices remain unchanged, the budget line shifts parallel to the right. The fourth diagram shows this change.

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Q 54.
Chapter 2: Consumer's Equilibrium - OBJECTIVE QUESTIONS [Page 2.51]

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Sandeep Garg Introductory Microeconomics [English] Class 11
Chapter 2 Consumer's Equilibrium
OBJECTIVE QUESTIONS | Q 54. | Page 2.51
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