14 **The budget line will shift parallel to the right if:**- ○ the price of the good on the vertical axis increases.- ○ income decreases.- ○ income increases.- ○ the price of the good on the vertical axis decreases.**Navigation Buttons:**- Previous- Next**Explanation:**In the context of consumer theory, the budget line represents the combinations of two goods that a consumer can purchase given their income and the prices of the goods. A shift to the right of the budget line indicates that the consumer can afford more of both goods. This generally happens when the consumer's income increases. The other factors listed would either cause a movement along the budget line or a shift in the opposite direction.

Answer The correct answer is 'option c ' i.e., income increases. The budget line will shift…

Business

Economics

14

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

**The budget line will shift parallel to the right if:**

- ○ the price of the good on the vertical axis increases.
- ○ income decreases.
- ○ income increases.
- ○ the price of the good on the vertical axis decreases.

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**Explanation:**

In the context of consumer theory, the budget line represents the combinations of two goods that a consumer can purchase given their income and the prices of the goods. A shift to the right of the budget line indicates that the consumer can afford more of both goods. This generally happens when the consumer's income increases. The other factors listed would either cause a movement along the budget line or a shift in the opposite direction.

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