Question

explain shift in budget line with diagram ​

Answer 1

The slope of the budget line (6.15) is –px/py = negative, and x-and y-intercept of the line are M/px and M/py, respectively.

Now suppose, initially the values of M, px and py are such that the budget line of the consumer has been obtained to be a line like L1M1 in Fig. 6.7.



If now the money income (M) of the consumer rises, px and py remaining unchanged, then, the slope (-px/py) of his budget line remaining constant, the intercepts of the line (M/px and M/py) would increase.

Answer 2

Answer:

budget line is the line which identify the budget off consumer