When the price of one'good increases and the price of the other good and income are held constant, the budget Bine Select one rotates so that the intercept is farther from the origin on the axis representing the good that has experienced an increase in price shifts parallel to the original budget line so that the new budget line is closer to the origin b. rotates so that the intercept is closer to the origin on the axis representing the good that has expe C.
When the price of one'good increases and the price of the other good and income are held constant, the budget Bine Select one rotates so that the intercept is farther from the origin on the axis representing the good that has experienced an increase in price shifts parallel to the original budget line so that the new budget line is closer to the origin b. rotates so that the intercept is closer to the origin on the axis representing the good that has expe C.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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