Question

Assertion (A): Budget line can shift to the right when the consumer is able to increase theconsumption of both goods.
Reason (R): When the level of income increases, the consumer will be able to buy morebundles of goods, which were previously not possible.
a) Both A and R are true and R is thecorrect ex

Answer 1

Answer:

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Answer 2

Assertion (A): Budget line can shift to the right when the consumer is able to increase the consumption of both goods.

• Both A and R are true and R is correct.
• A budget line is often described as an available budget since it restricts a consumer's overall consumption opportunities. Overall revenue equalises consumption in cash at all points is along the budget line.
• When a consumer's income goes up, he or she may afford more of the other services, producing in an outward, while rightward, motion in the budget line. Even before price drops, therefore, the consumers determine the quantity falls, and indeed the budget line slides inwards.