Question

Explain the impact of changes in income of the consumer and changes in price of
the goods on budget line with illustration​

Answer 1

Explanation:

Changes in Income and Shifts in Budget line:

Let BL be the initial budget line, given certain prices of goods and income. ' If the consumer's income increases while the prices of both goods X and Y remain unaltered, the price line shifts upward (say, to B'L') and is parallel to the original budget line BL