Question

Define a budget line? When can it shift to the right

Answer 1

a budget line represents all the combinations of goods and services that a consumer may purchase given current prices within his or her given income. If prices of the two goods remain unchanged, then with an increase in income, budget line of the consumer shifts to the right. when there is fall in the prices of two goods, let's say, X and y and if the income of the consumer remains unchanged, then also the budget line will shift to the right.

Answer 2

Answer: If prices of two goods remain unchanged, then with an increase in income, budget line of the consumer shifts to the right

Explanation: Similarly, if income of the consumer remains unchanged, the budget line will shift to the right when there is a proportionate fall in the prices of both goods X and Y and vice versa.